[Thurs]: Allendale said Bulgaria’s ag minister reports the country has not been able to control the spread of African swine fever and there are concerns the entire 600,000 pig breeding industry could be lost… [Weds]: National carcass base down $1.51… Iowa-Minnesota carcass base down $1.27… USDA reported carcass cutout values this afternoon fell 33 cents… “The escalating trade talk has whittled away at expectations that China would boost imports of U.S. pork in response to the crisis, even though the trade data shows they clearly have,” The Hightower Report said. “U.S. domestic pork prices are strong”…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 8/8/2019 8:58 AM
Lean hogs - Allendale said Bulgaria’s ag minister reports the country has not been able to control the spread of African swine fever and there are concerns the entire 600,000 pig breeding industry could be lost.
The hog market appears to have put in a major low this week, according to The Hightower Report.
Livestock markets mixed
The cattle market and hog market have both hit lows recently and are trying to rebound, according to The Hightower Report.
This morning’s weekly pork export numbers will be closely watched, Allendale said.
Wed 8/7/2019 4:41 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down $1.51 to $73.61/cwt.
National live rose 29 cents to $58.97
Iowa-Minnesota carcass base down $1.27 to $74.25
USDA reported carcass cutout values this afternoon fell 33 cents at $88.40/cwt.
“The escalating trade talk has whittled away at expectations that China would boost imports of U.S. pork in response to the crisis, even though the trade data shows they clearly have,” The Hightower Report said. “U.S. domestic pork prices are strong.”
“Even with today's triple digit gains, hog markets are still oversold according to Stochastics,” Stewart-Peterson said. “Prices have not exactly followed through on Monday's bullish key reversal with much enthusiasm, but the consolidation is also welcome after the steep sell-off recently.”
Cattle consolidating, hogs rebound
With cattle moving higher, trade is “consolidating in the wake of its steep selloff on Monday,” The Hightower Report said. “Prices have stayed within Monday’s wide range, and after being lower yesterday, they were higher today.”
Despite the trade war, the impact of China’s pork prices is still important to U.S. production, Stewart-Peterson said. “China's spot pig prices continue to rally, keeping U.S. futures supported today,” they said. “While the U.S. share of future China pork sales is likely declining with the recent tensions, other countries will have pork needs when they ship product to China.”
Taking a longer look at trade
Bloomberg took a look at the “big bets” both the U.S. and China are making in their trade negotiations. “For Trump, the bet is that a hard-line stance on China will help him win another four years in the Oval Office,” they wrote in the article.
Greg Johnson of The Andersons said with three more trading days until the upcoming report, “there is a wide range of opinions” as to what the acreage guesses will come out to. “Someone is going to be surprised on Monday.”
The Hightower Report said that traders are still concerned about the eastern corn-belt states, with moisture stress starting to develop. They said the 14-day percent of normal precipitation is continuing to worsen across the eastern belt “with many areas at 25% or less.”
“Monday's report could say any number of things and send prices either screaming higher or collapsing,” Stewart-Peterson said. “Take time to prepare between now and then to position yourself. We like a balanced approach. If you are behind on cash sales, we suggest making enough sales to feel comfortable or get current with recommendations. We also like the idea of purchasing puts against unpriced projected inventory. If concerned about corn that is already forward sold, consider purchasing call options against.”
“Cofco International, the trading arm of China's top food company, plans to increase soybean purchases from Brazil by 5% a year over the next five years,” Steve Freed of ADM Investor Services said. “Cofco exported roughly 13.0 million tonnes of grains and oilseeds from Brazil last year.”
China’s national grain and oils information Center slid their import estimate to 87.0 mln tonnes, down 2, as there is weak domestic demand from African Swine Fever, The Hightower Report said. The market is continuing to consolidate in Monday’s range, they said.
Wheat recovered from early session losses today, but they continue to struggle, Steve Freed of ADM Investor Services said. “Yesterday, traders were reminded that U.S. wheat remains overpriced compared to Black Sea origin wheat,” he said.
The wheat market is still trading on both sides of unchanged, Virginia McGathey of McGathey Commodities said. “The French ag minister said production is up 12% now, so that’s going to put some pressure on us,” she said. “It looks like there’s going to be a lot more weakness ahead of the USDA report, even though we’ve been able to move back to unchanged.”