[Mon]: China prices are at a new 14-month high… “The U.S. and Chinese pork markets continue to show signs that they bottomed with the spike low on Feb. 20,” The Hightower Report said. There were new African swine fever cases reported in China last week, and it was also reported that two more provinces in Vietnam had been affected, which supported prices… [Fri]: National carcass base rose $1.21… Iowa-Minnesota carcass base rose $1.83… USDA reported carcass cutout values this afternoon rose 79 cents… “Lower production pace recently has been a major source of strength for the hog markets,” Stewart-Peterson said. “This could change relatively soon with fast chain speed again this week”…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 3/11/2019 8:52 AM
Lean hogs - China prices are at a new 14-month high, which could support further buying of hog contracts today and spark some short-covering today, The Hightower Report said.
“The U.S. and Chinese pork markets continue to show signs that they bottomed with the spike low on Feb. 20,” The Hightower Report said. There were new African swine fever cases reported in China last week, and it was also reported that two more provinces in Vietnam had been affected, which supported prices.
Cattle on Feed gives mixed reactions
Friday’s Cattle on Feed report was considered bearish for deferred contracts and “friendly for the nearby,” The Hightower Report said. They noted that the numbers appear to have producers more current with marketings than expected. Last week’s cattle slaughter came in at 603,000 head, staying steady with the previous week.
Prices in China helped spark last week’s rally in hogs. Fund traders have a short position, so “it did not take much in the way of positive news on prices in China to support a significant rally late last week,” the Hightower Report said.
Fri 3/8/2019 4:23 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base rose $1.21 to $45.86/cwt.
National live fell 11 cents to $35.61
Iowa-Minnesota carcass base rose $1.83 to $46.73
USDA reported carcass cutout values this afternoon rose 79 cents to $65.04/cwt.
“Despite weak products and cash,” the lean hog market traded near daily limits today, as Ami L. Heesch of CHS Hedging said there were ideas the market was oversold.
“Lower production pace recently has been a major source of strength for the hog markets,” Stewart-Peterson said. “This could change relatively soon with fast chain speed again this week.”
Cattle on-feed doesn't surprise
Today’s Cattle on Feed report “isn’t much of a surprise,” Chris Lehner of ADM Investor Services said. Placements in feedlots during January was 5 percent below 2018 at 1.96 mln head. Marketings of fed cattle totaled 1.91 mln head, a 3 percent increase from last year.
“It is neither a bullish report or bearish in my opinion,” Lehner said. “I don’t think it is a secret there were and going to be less cattle placed. From the beginning of 2019, year to date slaughter has been down. It is possible over next couple of months kill could increase slightly with feeders ‘stunted’ and behind a month due to weather start moving to kill.”
WASDE weighs down markets
Not much changed in today’s WASDE report when it comes to soybeans. “USDA did little to the U.S. and World soybean supply and demand,” Steve Freed, VP of ADM Investor Services said. “This may have disappointed the demand bulls.”
There was also discussions of delays on a U.S./China trade deal, which hurt the market today, Freed said. “There was some talk that China may drop their import tariffs for U.S. imported goods over the weekend,” he said, but that failed to attract new buying.
Ahead of the WASDE, “prices were lackluster,” Ami L. Heesch of CHS Hedging said. “Weather still looks iffy for early to normal seedings this year.” The USDA did lower world ending stocks for corn, and raised 2018/19 carryout by 100 mln bushels.
Today’s report was “bearish” for corn, as U.S. ending stocks are at 1.835 bln bushels, higher than estimates were expecting, The Hightower Report said. However, this was partially offset by a lower world stock number, they said.
A “bust in the trade talks and ample supplies of soybeans” hurt soybeans today as they traded lower, Ami L. Heesch of CHS Hedging said. Ending stocks were lowered in today’s WASDE report, but they “still came in at 900 mln bushels, which is still more than we need.”
Stewart-Peterson said that most commodities have been under pressure. “Fundamentally, there is not much of a strong argument, with such a large carryout, to expect bean prices to race to the topside anytime soon unless there is a weather event or some significant development in trade talks that the market may not be expecting.”
Wheat finished mixed today as U.S. non-farm payroll data was negative to financial and energy prices, Steve Freed of ADM Investor Services said. There are still hopes that wheat could be included in a deal with China, but the “market appears to be trading higher World 2019 crop supplies and slower World economy,” he said.
USDA cut wheat exports by 40 mln bushels “which should not be a surprise to traders considering the recent slide in world wheat offers the last few weeks,” The Hightower Report said. “With U.S. futures down nearly 70 cents over the last eight weeks, the market seems to have priced in the bearish export outlook.”