[Weds]: Hopes that China may soon make some purchases on U.S. pork due to progress with a trade deal helped spark yesterday’s upturn in the lean hog market. Allendale also said that previously backed-up marketings in the U.S. are also starting to ease up… [Tues]: National carcass base was 37 cents… Iowa-Minnesota carcass base was up 32 cents… USDA reported carcass cutout values this afternoon rose $1.89… Export hopes and packer demand drove hog markets up today… Analysts were also watching news from China. “China's national average spot pig price is up nearly 2.5% on the week,” Stewart-Peterson said. “China has yet to make sizable ag purchases from the U.S. lately. Many are doubting that this will happen anytime soon, but pork will likely be on the shopping list”…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 7/10/2019 8:43 AM
Lean hogs - The Hightower Report is also seeing the news about China, saying the market has “priced in” a surge in pork production, however it remains a question of “if” a trade deal can be done. “Ideas that exports could pick up soon, plus talk that pork values may be cheap enough to help clear the market” helped support yesterday’s short-covering.
Yesterday saw a few hog contracts close limit-up, when buyers turned active after weak trade failed to attract new sellers, The Hightower Report said.
How will feeders react to limit-up trade?
After toying with limit-up trade in a few of the feeder cattle futures yesterday, the August feeder contract is now at its highest level since May 24. “There was word of strong activity on the video auctions as well as higher trade noted in Oklahoma City,” Allendale said.
Hopes that China may soon make some purchases on U.S. pork due to progress with a trade deal helped spark yesterday’s upturn in the lean hog market. Allendale also said that previously backed-up marketings in the U.S. are also starting to ease up.
Tue 7/9/2019 4:47 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was 37 cents higher to $66.66/cwt.
National live rose 38 cents to $51.34
Iowa-Minnesota carcass base was up 32 cents to $67.54
USDA reported carcass cutout values this afternoon rose $1.89 to $73.77/cwt.
Export hopes and packer demand drove hog markets up today. “Ideas that exports could pick up soon plus talk that pork values may be cheap enough to help clear the market helped to support short-covering,” the Hightower Report said. “In addition, Iowa/Minnesota cash markets were up 56 cents and there is talk that packer demand is picking up.”
Analysts were also watching news from China. “China's national average spot pig price is up nearly 2.5% on the week,” Stewart-Peterson said. “China has yet to make sizable ag purchases from the U.S. lately. Many are doubting that this will happen anytime soon, but pork will likely be on the shopping list.”
Hogs, feeders see sharp gains
“August cattle traded sharply higher on the day into the midsession after choppy to lower trade early failed to attract new selling interest,” the Hightower Report said. “The rally pushed the market up to the highest level since May 30. The discount to the cash market with Iowa and Nebraska trading as high as $114.00 on Friday was seen as a positive force as well.”
Hog markets were limit-up on export optimism and packer demand. “October hogs traded lower early in the session and down to the lowest level since June 20th but closed limit-up,” the Hightower Report said. “August hogs closed limit-up with an outside-day up. Buyers turned active after the weak action early failed to attract new selling interest.”
Soybeans rebound on the day
Corn markets were down, in part due to the latest Crop Progress report. “Prices are finding some selling pressure partly on yesterday afternoon's Crop Progress report,” Stewart-Peterson said. “Good to excellent ratings increased 1% over last week, now sitting at 57%. 98% of the corn is emerged vs 94% last week. Another source of pressure this morning has been weather forecasts.”
Soybeans started low but still surged higher. “The soybean market started the session lower with forecasts of improving weather conditions next week pressuring the market,” the Hightower Report said. “The market quickly turned higher in moderate volume with November soybean settling up 6 1/2 cents at 904 1/4 after putting in a new low for the move at 890 1/4.”
Analysts are expecting the upcoming warm weather forecasted to help the corn crop catch up after a slow and wet start. “Two-week U.S. Midwest weather forecast calls for mostly warm and dry weather the first week,” Steve Freed, with ADM Investor Services, said. “This should help crops mature from the record wet start.”
Exports and corn feeding were also sources of concern for markets. “U.S. corn export pace is below level needed to reach USDA goal,” Freed said. “Some feel that USDA 2019/20 export number of 2,150 mil bu may be too high given talk of record Brazil and Ukraine supplies. Higher U.S. wheat feeding could also lower corn feeding. This could offset a lower crop.”
Crop progress and condition drove soybeans up. “After the Monday close, NASS data showed just 7 states in double digits for percent blooming, as typically all states of the 18-reported states are in double digits…” Barchart.com said. “Condition ratings, most notably in IL took a hit, down 17 points from last week on the Brugler500 scale, with IN down 1 and MN 3 lower.”
In addition to crop conditions, talk of China buying soybeans helped drive markets higher. “Soybean futures traded higher on talk that China may buy U.S. farm goods during the trade negotiations,” Steve Freed, with ADM Investor Services, said. “Some had thought that China would not buy unless U.S. dropped all tariffs.”
“Wheat futures traded lower,” Steve Freed, with ADM Investor Services, said. “Fact USDA raised US winter wheat and spring wheat weekly crop ratings offered resistance. Word that Egypt bought East Europe and Ukraine wheat in their tender also offered resistance.”
“Wheat markets were lower on ideas of good harvest progress and high yields,” Jack Scoville, Price Futures Group, said. “USDA confirmed that the winter wheat harvest was moving faster than previously and also showed improved Spring Wheat crop condition. Reports from the fields indicates that yields are high as winter wheat crops have had more than enough moisture this year.”