[Tues]: Lean hog futures pushed sharply higher on the news of a Mexican trade deal… [Mon]: National carcass base down 62 cents… Iowa-Minnesota carcass base N/A… USDA reported carcass cutout values this afternoon rose 98 cents… There were discussions that the market already discounted the weak cash trend and ideas that the market is oversold, The Hightower Report said. Having no tariffs on Mexico also helped support the bounce, they said…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 6/11/2019 8:24 AM
Lean hogs - Lean hog futures pushed sharply higher on the news of a Mexican trade deal. The U.S. relies heavily on Mexico pork exports as they equate to 22% of U.S. production annually. Mexico is the largest U.S. pork buyer at a 30% share per year, according to Allendale.
The CME Fresh Bacon Index was down $10 from the week previous on June 7 at $143.20. The USDA pork carcass cutout value was up 98 cents Monday afternoon at $84.06, Brugler Marketing & Management reported.
Mexican tariffs dodge boosts livestock
The markets were slow to start but strong to close yesterday as opinions of market direction turn more optimistic. The Mexican tariff proposal is off the table, market fundamentals seem on solid ground and cattle owners are pricing all offerings higher. Futures moved close to limit up on many contracts, according to The Cattle Report.
The national average base hog was down 62 cents at $75.27 per hundred pounds. Estimated FI hog slaughter for Monday was 477,000 head. That is 10,000 head above last week and 33,000 head larger than the same Monday last year, according to Brugler Marketing & Management.
Mon 6/10/2019 4:43 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 62 cents to $75.27/cwt.
National live fell 52 cents to $58.41
USDA reported carcass cutout values this afternoon rose 98 cents at $84.06/cwt.
The lean hogs contract is up sharply as well today, the sharp turn coming after hitting its lowest level since March 12. “The market lacked new selling interest and futures rallied to close sharply higher on the day,” The Hightower Report said.
There were discussions that the market already discounted the weak cash trend and ideas that the market is oversold, The Hightower Report said. Having no tariffs on Mexico also helped support the bounce, they said.
Cattle, hogs see increases
Avoiding tariffs with Mexico over the weekend has “renewed optimism” for livestock trade, Oliver Sloup of Blue Line Futures said.
All August cattle contracts finished sharply up, with the live cattle contract finishing limit up. “Talk that the break Friday was overdone and that the lighter average weights could mean that feedlots are current with marketings helped to support,” The Hightower Report said.
Choppy day in grains as planting progresses
Before the release of the Crop Progress report this afternoon, the trade was choppy on the day according to CHS Hedging’s Ami L. Heesch. Tomorrow also marks the Supply and Demand report which will also give the markets a direction.
The report, which released at 3 p.m., showed corn plantings at 83% through Sunday, 17 percentage points behind the 5-year average. Corn condition came in at 59% Good/Excellent, well behind last year’s ratings.
Soybeans planted are at 60% complete, 28 percentage points behind the 5-year average.
Oliver Sloup of Blue Line Futures said there is renewed optimism in the market right now, as he said there could be more “premium flowing into the markets” after tomorrow’s report. It is expected that the WASDE report may hint toward “additional walkbacks” by the USDA, Sloup said.
With corn export inspections for the week coming in at 850,647 tonnes, having the continued business channels open with Mexico and avoiding a tariff issue for the time being. However, The Hightower Report said there is still “plenty of uncertainty on just how much of the crop can get planted.”
Prices saw support from “decent” weekly export inspections and positioning ahead of tomrorrow’s WASDE report. However, favorable weather for planting is giving prices a lid for the day, Ami L. Heesch of CHS Hedging said.
With the late corn plantings, there are concerns additional soybean acres will add to the major supply of beans already in supply. “This is seen as a bearish force and the short-term weather forecast allows for increased planting,” according to ADM Investor Services. “The technical action is weak and the market is overbought and looks vulnerable to a bit more selling before finding support.”
Dryness in the Black Sea continues to bring wheat prices support, Ami L. Heesch of CHS Hedging said. There is expected to be more heat coming to Russia over the next few weeks adding to concerns.
While there is dryer weather, improving crop conditions in the U.S. is continuing to pressure the market. “It may take a significant crop issue to see a resumption of the uptrend,” ADM Investor Services said.