[Tues]: The cattle market collapsed again yesterday, led by demand fears, global economic concerns and worse chances that China will expand its beef imports to include the U.S., according to the Hightower Report… [Mon]: Boxed beef cutout values this afternoon were firm to higher… Choice rose 47 cents… Select went up $1.43… In negotiated cash sales in Nebraska, the USDA reported 120 head sold dressed at $190, with no live sales. In Iowa/Minnesota, 160 head were sold live at $118, while 1,830 head sold dressed at $185-190…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 5/14/2019 9:01 AM
Cattle - The cattle market collapsed again yesterday, led by demand fears, global economic concerns and worse chances that China will expand its beef imports to include the U.S., according to the Hightower Report.
Dressed beef values were higher with choice up 0.47 and select up 1.43, Allendale reported. The CME feeder index is 135.39.
USDA estimated weekly FI cattle slaughter at 121,000 head for Monday, Brugler Marketing & Management said. That was up 2,000 head from the previous week and 4,000 above the same week last year.
Analysts hoping for rebound in livestock prices
Live cattle futures saw $1.45 to $2.70 losses on Monday. Weakness in hogs was an influence, and new Chinese tariffs were also added to beef and chicken, according to Brugler Marketing & Management.
“We’ll see if we can recover here today along with a lot of these other commodity markets,” said Joe Vaclavik of Standard Grain.
Mon 5/13/2019 4:22 PM
Boxed beef cutout values this afternoon were firm to higher moderate to good demand and light to moderate offerings, USDA said.
Choice rose 47 cents to $221.58/cwt.
Select went up $1.43 to $208.89.
In negotiated cash sales in Nebraska, the USDA reported 120 head sold dressed at $190, with no live sales. In Iowa/Minnesota, 160 head were sold live at $118, while 1,830 head sold dressed at $185-190.
“There are real concerns this market won’t be able to recover before summer,” Virginia McGathey of McGathey Commodites said. That has pressured the markets, she said, helping build downside momentum. She said some traders are nervous the losses in live and feeder cattle might be an “all-around fall-apart.”
Funds are continuing to liquidate their large net long positions in live cattle, Ami L. Heesch of CHS Hedging said. “There are also concerns regarding the retaliatory tariffs from China, as U.S. beef will likely be on the list of tariffed goods,” she said.
Cattle, hog futures fall hard
The livestock market was deep red today across the board.
The August fed cattle contract finished at its lowest close since May 21, 2018, on fears of an extended trade war, which would hurt the global economy, The Hightower Report said. There was also weakness in U.S. beef values and speculative long liquidation which also sparked the down day.
With China’s retaliation in the trade war, the hog market fell sharply in multiple contracts today. Virginia McGathey said it seemed impossible there could be increased volatility, but that looks like where we are headed. “We are going to have to hang on to our hat,” she said.
Trump indicates aid may be coming
This afternoon, President Trump told reporters that farmers may receive around $15 bln in aid amidst the ongoing trade war. He said the large number is based off the highest year of Chinese purchases, and they will “do something reciprocal to our farmers so our farmers can do well,” Reuters said. No other details were given at this time.
Trump also indicated he will be meeting with Chinese President Xi Jinping next month at a G20 summit in Japan, following China’s announcement it will impose retaliatory tariffs on U.S. goods. According to Rueters, Trump said the discussions would be “very fruitful.”
After taking early losses today, the corn market recovered throughout the session, The Hightower Report said. With traders expecting the low planting numbers in today’s Crop Progress report, which are well below the 5-year average, the outside trading day up is a “positive signal,” they said.
The corn market also took some spillover strength from the wheat market to help during the day. Export inspections came in near the top end of estimates at 1 mmt, which also boosted the prices, Ami L. Heesch of CHS Hedging said.
Crop Progress: Corn planted sits at 30% complete as of May 12, according to the latest USDA report. The mark is 7 percentage points up from last week, but down 29 points from last year and 36 points from the 5-year average.
Soybean export inspections finished in the middle of trade estimates, at 513,000 tonnes, but “poor demand, big stocks and fears of increased soybean acres from ongoing delays” helped to keep the market down today, Ami L. Heesch of CHS Hedging said.
With soybeans tumbling, Steve Freed of ADM Investor Services did not offer much reason for trade optimism. “(The) fact China wants a better deal does not suggest a deal is close,” he said. “China may be a reluctant buyer of U.S. soybean unless there is a deal.”
Crop Progress: Soybeans planted sits at 9% complete as of May 12, according to the latest USDA report. The mark is 3 percentage points up from last week, but down 23 points from last year and 20 points from the 5-year average.
Wheat futures were the bright spot in the grain trade today, seeing gains over Friday’s high. “Weak U.S. stock market and better than expected U.S. weekly wheat exports may have triggered some fund short covering,” Steve Freed of ADM Investor Services said.
Today’s export inspection number came in at 842,418 tonnes, and cumulative inspections are 0.4% ahead of last year’s mark at this time, The Hightower Report said. That helped the markets push wheat up, as it was the largest wheat inspection total since September 2016.
Crop Progress: Winter wheat headed sits at 42% as of May 12, according to the latest USDA report. The mark is 13 percentage points up from last week, but down 1 point from last year and 12 points from the 5-year average.