[Tues]: If prices in China continue to rise, combined with good progress in trade talks, “China is in a position to be an aggressive buyer of U.S. pork,” The Hightower Report said. “For now, however, funds are trying to hold onto their net long position”… [Mon]: National carcass base rose 51 cents… Iowa-Minnesota carcass base rose $1.49… USDA reported carcass cutout values this afternoon fell $1.29… Oliver Sloup of Blue Line Futures said the markets would “love” to have China as a bigger buyer of U.S. pork, but said he believes China will have “no choice” but to step in for large quantities. “We want to see China start stepping in a more meaningful way,” he said…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 7/9/2019 9:24 AM
Lean hogs - If prices in China continue to rise, combined with good progress in trade talks, “China is in a position to be an aggressive buyer of U.S. pork,” The Hightower Report said. “For now, however, funds are trying to hold onto their net long position.”
Hog futures extended their downward trends Monday and U.S. export sales for the week ending June 27 came in Friday at 23,500 tons vs. a previous four-week average of 26,575 tons, said Stewart-Peterson. There is no official word if China will buy U.S. pork products as a goodwill gesture before the next round of trade talks. They called the technical price action from yesterday’s trade “very poor.”
Traders may see cattle as overbought
There was pressure on the beef market early this week as traders tried to determine if last week’s rally was overdone, according to the Hightower Report.
For the moment, the bull camp for hogs is still hanging in limbo, said Blue Line Futures. If weakness continues today it is possible prices could run back towards the June 24 lows for hogs.
Mon 7/8/2019 4:14 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base rose 51 cents to $66.27/cwt.
National live had no comparison, and sits at $52.40
Iowa-Minnesota carcass base rose $1.49 to $67.11
USDA reported carcass cutout values this afternoon fell $1.29 to $71.88/cwt.
Oliver Sloup of Blue Line Futures said the markets would “love” to have China as a bigger buyer of U.S. pork, but said he believes China will have “no choice” but to step in for large quantities. “We want to see China start stepping in a more meaningful way,” he said.
The August contract was unable to get “significantly through” the initial resistance on the early rally at $78.20, and The Hightower Report said that sparked additional selling today. “While pork prices bounced Friday, they were still under the previous week level and production remains very high.”
Hogs unable to find demand support
Hogs had a mixed day and are an “anchor” on the livestock complex, Virginia McGathey of McGathey Commodities said. She cited uncertainty in exports and that “demand is just really not there. … I don’t see the market selling off that hard, but still, hanging around on these lows could be cumbersome.”
The beef market weakness “does not bode well for the cash market outlook,” The Hightower Report said. “Ideas that the rally last week was overdone with beef prices in a downtrend and down to the lowest level since Feb. 20 helped to pressure.”
Crop conditions remain steady
Today’s Crop Progress report, released after the close of trade today, showed corn condition as slightly improved. It received an overall 57% good/excellent rating, a bump up from the 56% number last week.
Soybeans are sitting at only 96% planted, still behind the 5-year average, with a slight decrease in condition. The current crop was rated at 53% good/excellent, down from 54% last week. At this point last year, the crop had a 71% good/excellent rating.
John Payne of Daniel’s Trading said the report was “somewhat surprising,” as they expected an increase of two percentage points for both corn and beans. He said with the lower than expected conditions, it should give the market some support overnight. “Whether or not that gets follow-through, that remains to be seen,” he said.
After a stronger overnight showing, corn was unable to capitalize into a rally today, only gaining around 1 cent for the upcoming contracts. Kathleen Murphy of CHS Hedging said traders are “exiting out of positions in order to lock in profits before the report on Thursday.”
Planalytics lowered their corn yield estimate to 166.4 bushels per acre, down a full bushel from their previous estimate, The Hightower Report said.
It was a choppy trade day, but the hot and moisture-free forecast ended up supporting the market slightly, Kathleen Murphy of CHS Hedging said. Exports came in below expectations for the week, but held steady from last week’s number.
A firmer soybean market came ahead of today’s crop progress report, which came out after the close. Virginia McGathey of McGathey Commodities said after the questions regarding the June acreage report, there are many traders who may not respond as dramatically to the upcoming WASDE report.
Oliver Sloup of Blue Line Futures said there is harvest pressure in the wheat market. “If we get some momentum in the corn and soybean market, that could spill over to some positive money flow for wheat, but we don’t think it has the ability to rally on its own,” he said.
Yields are still being reported “above expectations” in the western plains, according to Kathleen Murphy of CHS Hedging. Exports were a bit lower this week, but “still better than the average estimates needed to reach the USDA’s 900 mln bushel projection.”