[Thurs]: While the idea that the trade deal with China may not be completed until April, may be negative, “the shortage of pork in China is real,” said the Hightower Report. In the past when China has been short of any base commodity, it will not be shy about buying on the world market… [Weds]: National carcass base up 89 cents… Iowa-Minnesota carcass base rose $1.64… USDA reported carcass cutout values this afternoon rose 23 cents… “The market still looks very, very strong,” Virginia McGathey said. “Overall sentiment is very, very good and are we close to the China deal? Maybe.” She said that pork prices are up about 20 percent in China and that indicates to her they may be in need of U.S. pork once a deal gets completed…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 3/14/2019 9:12 AM
Lean hogs - While the idea that the trade deal with China may not be completed until April, may be negative, “the shortage of pork in China is real,” said the Hightower Report. In the past when China has been short of any base commodity, it will not be shy about buying on the world market, The Hightower Report said.
The March Hogs and Pigs report is scheduled to be released on March 28. Tight margins and losses in 2018 and 2019 are incentives for the industry to slow breeding herd expansion.” We will look to that USDA report for signs of slower breeding herd growth,” said Chris Hurt, farmdoc Daily, University of Illinois. However, that may not occur since several factors are still in favor of expansion including processor capacity. “Time will tell,” Hurt said.
Pork trade increase expected
It is becoming more and more likely that world trade in pork will increase significantly this year, led by a massive increase in China’s exports. This should help provide underlying support to the hog market, said The Hightower Report.
Brazil’s exports in February were a record high and were up 14 percent from January, led by a jump in Asia, The Hightower Report said.
Meanwhile, on the beef side, the very wet weather in the Plains is holding weights and beef production low, said The Hightower Report.
Wed 3/13/2019 4:36 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base up 89 cents to $50.44/cwt.
National live rose 37 cents to $38.44
Iowa-Minnesota carcass base rose $1.64 to $51.63
USDA reported carcass cutout values this afternoon rose 23 cents at $67.85/cwt.
“The market still looks very, very strong,” Virginia McGathey said. “Overall sentiment is very, very good and are we close to the China deal? Maybe.” She said that pork prices are up about 20 percent in China and that indicates to her they may be in need of U.S. pork once a deal gets completed.
The market was higher on the deferred contracts on hopes that a U.S./China trade deal would lead to increased pork exports to China, The Hightower Report said.
Weather helps cattle, pork optimistic
The market traded higher in cattle today in the midst of threatening weather and strong beef prices, The Hightower Report said. “The very wet weather in the Plains is holding weights low and production low and ideas that the selling yesterday was overdone helped to pressure,” The Hightower Report said.
“The regained sense of optimism regarding U.S./China trade negotiations is also a major supportive force as many expect China to import U.S. pork products to replace lost pork from African swine fever deaths,” Stewart-Peterson said.
Trade news looms over markets
Reuters is reporting this afternoon that President Donald Trump said he was in no rush to complete a trade deal with China. “I think things are going along very well, we’ll just see what the date is,” Trump said. “I’m in no rush. I want the deal to be right.”
Ami L. Heesch of CHS Hedging said that the current version of the USMCA (which is replacing NAFTA) “may not receive approval by the Democratic party as it stands.” She said there are unanswered questions on a few items that may cause a hold up.
There were rumors that China bought U.S. corn today, however a lack of confirmation gave just as much resistance to the market today, Steve Freed of ADM Investor Services said. With rumors of a possible signing date for a new trade deal, traders are also wary.
“Hopefully the low is in for corn,” Virginia McGathey of McGathey commodities said. “We are really in the wait and see stage, waiting for more news. … Keep your eyes open for whatever comes out of the White House.”
Short-covering was the primary reason for a rise in prices today, Ami L. Heesch of CHS Hedging said. “Uncertainty about the U.S./Chinese trade deal seems to have kept the market trading in small ranges,” she said.
The market got a boost from Brazil cutting some of their crop estimates, Virginia McGathey of McGathey Commodities said. She said it looks like today was a reprieve and the fact the market stayed above unchanged was a positive.
Some traders felt that Tuesday’s big day in wheat was more technical than fundamental, Steve Freed of ADM Investor Services said. “Wheat futures had become oversold with funds increasing net short position on increase volume and open interest,” he said.
Prices reverted back to the red today, as some traders pressured prices on profit taking, Ami L. Heesch of CHS Hedging said. “Losses were limited from the funds holding an estimated large net short position in wheat, which makes the wheat market vulnerable to short-covering rallies,” she said.