[Mon]: … “The last of a trade deal could keep demand for U.S. pork slow for now,” they said, however, “We are entering a very strong seasonal period for cash and pork product prices and this may help the market forge a near-term low”… [Fri]: National carcass base rose 28 cents… Iowa-Minnesota carcass base was down 7 cents… USDA reported carcass cutout values this afternoon fell 66 cents… With another African swine fever case reported in Hong Kong, the threat of more Chinese losses in pork continues to stay prominent amidst the trade war…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 5/13/2019 8:41 AM
Lean hogs - The hog market is at one of its choppiest moods which brought short-term trading opportunities. “We continue to believe the market has room to work to the upside over time,” Blue Line Futures said. “We are looking out to deferred contracts.”
A lack of any developments in the trade negotiations “kept a lid on any new buying” last week, The Hightower Report said, but the traders who were already in the market held on to their gains from Thursday, a positive sign.
Cattle rally may continue this week
A rally late in the week helped cattle futures “but it was just shy of a positive weekly close,” Blue Line Futures said, marking the third week in a row for a weekly close down. They said the market had a similar sell off last year, and the market is “4 points more oversold this year” based on the RSI. Due to that, they expect to see some relief, they said.
With African swine fever still spreading, China still has a “significant” pork need, The Hightower Report said. “The last of a trade deal could keep demand for U.S. pork slow for now,” they said, however, “We are entering a very strong seasonal period for cash and pork product prices and this may help the market forge a near-term low.”
Fri 5/10/2019 4:34 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base rose 28 cents to $80.80/cwt.
National live fell 16 cents to $61.36
Iowa-Minnesota carcass base was down 7 cents to $82.63
USDA reported carcass cutout values this afternoon fell 66 cents to $86.16/cwt.
Hogs saw a good amount of mixed trade today, as the market feels out where the U.S. is in regards to China. “The volatility in the hog market is likely related to the unknowns regarding China,” Michaela White, of CHS Hedging, said.
No surprise developments in the China/U.S. trade negotiations “kept a lid” on the market today, The Hightower Report said. With another African swine fever case reported in Hong Kong, the threat of more Chinese losses in pork continues to stay prominent amidst the trade war.
Cattle bounce back to end week
Cattle saw a bounce today after the sell-off that has been seemingly endless since the end of April. Short-covering and talk of the oversold condition sparked the rally at the end of the day, and “traders are waiting to see if there is any sign of a pop in the beef market at this time of the year,” The Hightower Report said.
This week’s slaughter estimates came in at 599,000 head for cattle and 2.332 mln head for hogs.
The cattle number is down 5,000 head from last week and matches the number set last year for the same period. Hogs were 22,000 under last week, but still 65,000 head over last year’s amount.
Trade news quiet while supply stays high
With trade questions still looming heading into Friday afternoon and the weekend, President Trump said there is “no rush” to reach a deal with China, according to a Reuters report.
Reuters also said that with the uncertainties in trade, U.S. Agriculture Secretary Sonny Perdue is saying Trump is working on a plan to help farmers deal with the impact of the trade war.
Today’s Supply and Demand report came in at the top of the expected ranges. U.S. corn ending stocks for 2019/20 were at 2.485 bln bushels, with 2018/19 stocks pegged at 2.095 bln. Soybean ending stocks were at 970 mln bushels for 19/20, while the 18/19 stocks were at 995 and wheat’s 19/20 ending stocks were put at 1.141 bln bushels, with 1.127 for 18/19.
“While a lot of these numbers below probably have been factored-in, this is not a report that scares the shorts,” Mike Zuzolo of Global Commodity Analytics said. “Our best situation now is that we have the planting weather bring some sense of equilibrium to the market.”
The USDA’s projection of increased corn carryout was higher than expected, and Steve Freed of ADM Investor Services, said it may be due to lower ethanol use. Overall, Freed called the report “bearish,” with the higher numbers, saying the “USDA numbers and delay in U.S. and China trade deal will put pressure on US farm gate prices.”
Aside from the bearish report, weather is proving to be a factor in the corn market, as the forecasts appear to be improving for planting, Michaela White of CHS Hedging said.
WASDE: World carryover for corn came in with estimates of 325.9 mmt this year, and 314.0 for the 2019/20 year.
After the Supply and Demand numbers came out this morning, Mike Zuzolo said the soybeans may find the most support of these numbers. “I am fearful that this is just short-term spreading of beans over corn given the size of the new-crop corn by USDA,” Zuzolo said.
Despite an overall bearish report, “the market may have priced in much of the bearishness,” The Hightower Report said, noting the oversold nature of soybeans at the moment.
WASDE: World soybean carryover for the 2018/19 year is expected to come in at 113.2 mmt, with the 2019/20 estimate pegged at 113.0 mmt.
The forecast for U.S. winter wheat production is being estimated at 1.27 bln bushels, with fields averaging 50.3 bpa, Michaela White of CHS Hedging said.
A “bearish sentiment” is weighing on futures right now, Virginia McGathey, of McGathey Commodities, said. “Next week, maybe we can get some footing,” she said, hoping that bargain hunters might move in to help support possibly oversold products.
WASDE: World wheat carryover is estimated at 293.0 mmt for 2019/20, versus 275.0 for 2018/19.