[Thurs]: Allendale said that the Chinese government urged regional bodies to provide financial support for sow farms and large scale hog farms to increase production. They want these bodies to provide credit guarantees on new loans and extensions on expiring loans… [Weds]: National carcass base was up 31 cents… Iowa-Minnesota carcass base down 47 cents… USDA reported carcass cutout values this afternoon fell 58 cents… The hog market firmed up overall today, with the exception of the upcoming June contract. Virginia McGathey said commercial buying really helped support the market today, and the sentiment is that Asia will need pork soon, and that is still expected to be the sentiment long term…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 6/6/2019 8:49 AM
Lean hogs - Allendale said that the Chinese government urged regional bodies to provide financial support for sow farms and large scale hog farms to increase production. They want these bodies to provide credit guarantees on new loans and extensions on expiring loans.
Hong Kong lawmakers are demanding answers about the seriousness of the African swine fever outbreak after rumors began circulating that at least 30 percent of pig farms in mainland China that supply the animals to Hong Kong have been hit by the virus, according to Reuters.
Mexico tariffs could impact beef
On the beef end of the possible tariffs against Mexico, it is true they are our number 3 buyer of processed beef with a 14% share of all exports. At the same time, we receive 1.3 million head from them in the form of lightweight calves and feeders. That comes out to 5% of our steer/heifer slaughter annually, Allendale said.
Live and Feeder Cattle have continued to work sideways to slightly high in a still predominately down trending market, according to the Nemenoff Report.
Wed 6/5/2019 4:54 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was up 31 cents to $76.34/cwt.
National live fell $1.05 to $58.70
Iowa-Minnesota carcass base down 47 cents to $77.29
USDA reported carcass cutout values this afternoon fell 58 cents to $83.07/cwt.
Buying came about later in the day as the August hogs contract finished near the day’s highs. “Some hope for better demand for U.S. pork if Canada continues to have trouble with trade with China helped to support a bounce,” The Hightower Report said.
While the June contract found pressure today as speculators are moving out of ownership positions into more deferred months, Stewart-Peterson said the outlook is bullish as the July and August contracts held firm on their 200-day moving averages.
Cattle continues to bounce back
The cattle market traded to a 3-session high today, with the August feeder contract the big winner today. “Talk of the oversold condition and ideas that the recent move to contract lows might have helped to support better demand helped to support a bounce,” The Hightower Report said.
The hog market firmed up overall today, with the exception of the upcoming June contract. Virginia McGathey said commercial buying really helped support the market today, and the sentiment is that Asia will need pork soon, and that is still expected to be the sentiment long term.
China, Mexico disputes hang over trade
Steve Freed of ADM Investor Services said with the Chinese dispute continuing and the current Mexico issues is how much it is impacting U.S. demand. “Why would funds buy anything without a trade war resolution?” he said. “Especially if US weather improves over the next few weeks.”
There is expected to be more information later this week on the Market Facilitation Payments and how that program will be able to help those that take prevent plant as an option this year, The Hightower Report said. They suggested the announcement could come on Friday or next week as President Trump may be in Iowa.
With additional Mexican tariffs possible, “it is going to be difficult for a lot of farmers in light of the fact they are bearing the brunt of the China problem,” Virginia McGathey of McGathey Commodities said. She said there is concern about acres and yields, which may bring some room on the upside, but the market overall weighed on grains today.
Dry weather over the next seven days is expected, helping to pressure the corn market significantly today, The Hightower Report said. There was also a sharp sell-off in crude oil while is weighing on prices as well, they said.
No trade deal is limiting new buying from China, Steve Freed of ADM Investor Services said. “Threat of POTUS imposing a tariff on Mexico goods could also slow their buying of U.S. soybean and soymeal,” he said.
Increased soybean acres will cap any rally that may be found in soybeans, Virginia McGathey of McGathey Commodities said. “There are so many bearish factors,” she said, citing trade and other issues that may drag down the soybean markets.
“The fact USDA this week rated the 2019 US spring and Winter wheat crop higher than expected may have also weighed on prices,” Steve Freed of ADM Investor Services said. “Informa estimated US 2019 wheat acres near 45.0 million versus USDA 45.8 and 47.8 last year. Informa also suggested that US 2019 wheat yield would be near 49.7 vs USDA 48.6.”
The wheat outlook is bearish as “traders were likely exiting long positions to as sell stops were triggered,” Stewart-Peterson said. “A reversal downward moving into harvest may have also triggered additional cash selling by producers.”