[Fri]: A continued sharp advance of prices in China plus a move to the highest level in two years for U.S. pork cut-out values would suggest more upside in hogs over the near-term, according to The Hightower Report… [Thurs]: National carcass base down $1.52 lower… Iowa-Minnesota carcass base up 1.24 lower… USDA reported carcass cutout values this afternoon rose 29 cents… William Moore at the Price Futures group says, “We have learned the hard way – that expectations are just that and no more”… Total commitments for hogs to China have now reached 255,000 tons compared to the five-year average of 56,000 tons this time of year, says Stewart Peterson…
Farm Commodity Newsletter/Iowa Farmer Today
Fri 8/9/2019 9:12 AM
Lean hogs - China is still likely to be a more aggressive than normal buyer of pork on the world market, which should cause U.S. pork exports to remain somewhat elevated, according to The Hightower Report.
A continued sharp advance of prices in China plus a move to the highest level in two years for U.S. pork cut-out values would suggest more upside in hogs over the near-term, according to The Hightower Report. The export sales news to China is still low, but the market seems to have priced-out China as a significant buyer of U.S. pork, and the jump in sales to Canada may be seen as a positive development.
Possibilities in livestock markets
A continued sharp advance of prices in China would suggest more upside for hogs in the mid-term, according to The Hightower Report.
The trade war with China also continues to be a factor, Allendale reported. China bought small amounts of U.S. soybeans, wheat, sorghum and pork last week before trade tensions escalated earlier this week in what may be the last U.S. commodity sales to China for the foreseeable future.
Thu 8/8/2019 5:19 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down $1.52 lower to $72.01/cwt.
National live was lower 92 cents at $58.33
Iowa-Minnesota carcass base up 1.24 lower to $73.03
USDA reported carcass cutout values this afternoon rose 29 cents at $88.69/cwt.
Hog markets were mixed today. CME hog index was down 76 cents to 83.43, said Stewart-Peterson.
Slovak officials confirmed the country’s first outbreak African swine fever, ADM Investor Services reports.
William Moore at the Price Futures group says, “We have learned the hard way – that expectations are just that and no more.” This year we started out with some great ones- substantial exports generated by Asian swine fever (ASF) and a resolution of the U.S./China trade issues but those exports never materialized and the market promptly erased the premium. But in doing so, it dropped to price levels that attracted some demand – especially of the “barbeque variety” and it now appears a seasonal low has been established, Moore says.
Livestock sales to China on up trend
Despite the ongoing trade wars, livestock is still moving to China. Cumulative sales to China reached 4900 tons which strongest pace since 2003, said Stewart-Peterson.
Total commitments for hogs to China have now reached 255,000 tons compared to the five-year average of 56,000 tons this time of year, says Stewart Peterson.
Weather continues to puzzle yield predictors
The Ag markets got a twirl today on position squaring ahead of the anticipated USDA data dump on Monday, weather forecasts for the upcoming week and concerns of crop losses, says CHS Hedging.
Eyes also remain on weather reports. The Midwest weather forecast has no major changes over the next 10 days with less than average precipitation, especially in the east, and below average temperatures, says ADM Investor Services. The 10 to 16 days forecast show average to a bit lower temps and bit lower than average rainfall.
Stewart-Peterson also notes that yields may drag with current dry conditions.
“The market action in the past month has been decidedly bearish,” but William Moore at the Price Future's Group, thinks the low prices aren’t really taking into consideration the poor condition of the U.S. corn crop. Moore is anxious to see the August Crop Report to be release on Monday which “will be more significant than your normal August report – as it will Include adjustments from the bogus USDA June 28 Acreage Report,” he said.
Corn prices rallied on crop concerns with a drier forecast in the mix. Gains were limited on less than ideal weekly export sales, CHS Hedging says.
Here, soybean prices took to the high side today on a flip in the weather outlook, says Ami Heesch, CHS Hedging. “There are concerns about persistent dryness in parts of the Upper Midwest that could drag down yield prospects in the soybean crop.” Prices drew additional support from spillover strength in the soyoil pit, she said.
However, soybean prices have dropped nearly 90 cents from their high. “We expect farmer selling has likely dried up,” said Stewart-Peterson.
Wheat prices were higher with Chicago in the lead on technical buying and active spread trade, says Ami Heesh of CHS Hedging. She attributes some of the increase to “borrowed strength in the row crops.”
Stewart-Peterson also noted that the corn and soybean markets are also affecting wheat prices currently. “The world seems to be sitting on ample supplies of wheat right now,” Stewart-Peterson also noted.
Export woes continue to plague the grain complex – and U.S. wheat was probably the first to be victimized – as its price on the world market is not competitive, says William Moore at the Price Futures Group. “This is why most every time Egypt tenders for wheat, the U.S. is excluded.” The only other “rally potential” would be of the “spill-over” variety -from corn and beans beans – and of late - that has been a factor, Moore says.