[Mon]: With China still expected to be a “more aggressive than normal” pork purchaser on the world market, U.S. exports should remain elevated indirectly if China goes to other countries for their needs, The Hightower Report said… [Fri]: National carcass base down 79 cents… Iowa-Minnesota carcass base down 22 cents… USDA reported carcass cutout values this afternoon rose $1.75… Pork values are at their highest levels in two years, but U.S. pig prices have begun to decline while Chinese pig prices continue to surge, said Stewart-Peterson. The U.S. will not be able to sell much, if any, pork to China anytime soon, but the U.S. should be able to meet pork needs of those who are able to sell pork to China, Stewart Peterson added…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 8/12/2019 8:48 AM
Lean hogs - With China still expected to be a “more aggressive than normal” pork purchaser on the world market, U.S. exports should remain elevated indirectly if China goes to other countries for their needs, The Hightower Report said.
“With strong packer margins, strong pork values now and lower than normal weights, the market appears undervalued if U.S. pork exports are higher than normal in the months ahead,” The Hightower Report said.
Tyson plant fire may impact markets
A Tyson Foods meat-processing plant in Kansas took “significant damage” following a fire on Friday night. Tyson said the plant will remain closed for the time being. “A prolonged closure could force the company to move cattle designated for slaughter to another facility, which could result in additional cost,” Allendale said.
“This plant harvests 27,000-30,000 head per week (roughly 5% of weekly slaughter), this closure will likely pressure prices to start the week,” Blue Line Futures said. They also added that today’s USDA report will cause some volatility in the grains “potentially leaking over into cattle futures.”
Fri 8/9/2019 4:53 PM
In weighted average negotiated prices for barrows and gilts, USDA reported:
National carcass base down 79 cents to $70.98/cwt.
National live $1.30 lower at $55.54.
Iowa-Minnesota carcass base down 22 cents to $72.25.
USDA reported carcass cutout values this afternoon rose $1.75 to $90.44/cwt.
October hogs were moderately lower “after poking at yesterday’s high earlier in the session” and trading their highest today since Tuesday, said The Hightower Report.
October hogs briefly tested their overhead 10-day moving average resistance level today, but have since backed off towards the lows of the session. December hogs had been choppy most of the session, briefly testing nearby resistance, Stewart-Peterson said.
Pork values depend on China
Pork values are at their highest levels in two years, but U.S. pig prices have begun to decline while Chinese pig prices continue to surge, said Stewart-Peterson.
The U.S. will not be able to sell much, if any, pork to China anytime soon, but the U.S. should be able to meet pork needs of those who are able to sell pork to China, Stewart Peterson added.
Average cattle weights are lighter than last year and well below the 5-year average, keeping production in check, said Stewart-Peterson.
Market readies for Monday report
Soybean buying slowed considerably on Friday before Monday's USDA Supply and Demand report, said Stewart-Peterson.
“Following the report, focus will shift quickly back to weather during the critical month of August,” Stewart-Peterson said.
On the international front, President Donald Trump said he was not ready to make a deal with China.
“The current trade war feels like it could take a very long time to either make significant progress or come to a resolution,” says Ami L. Heesch with CHS Hedging.
Corn prices were mixed today on positioning ahead of the weekend and next week’s USDA crop data. The market is focused on planted acres and the fact that there should be a significant reduction from the earlier forecast of 91.7 million acres, says Ami L. Heesch of CHS Hedging.
Crop conditions are expected show a 1-2% decline in Monday’s crop conditions report, Heesch said.
Internationally, Brazilian farmers are planning to plant more corn in the 2019-20 crop season, according to a Reuters poll. Farmers are planning to increase their planting by 3.46 % starting in September, ADM Investor Services said today.
Soybeans prices were stronger on borrowed strength in the soy oil market, dryness across parts of the U.S. Upper Midwest this week and position squaring ahead of Monday’s crop data, Heesch of CHS Hedging said.
“Gains were limited on fears of a seriously long tail to the current trade war with China,” Heesch said.
The Hightower Report says the close of soybeans above the 18-day moving average indicates an intermediate-term positive trend.
Wheat trade was choppy ahead of the USDA report as traders square up their positions. Spring wheat harvest is going in the northern Plains with early reports of 60 pounds, 12-15% moisture and 15 plus protein. The bulk of the harvest is expected to begin in the next week or two, CHS Hedging reported.
Internationally, Russia makes a deal with Saudi Arabia to export wheat, Argentina is bracing for its biggest wheat harvest in a long time, and Australia wheat country is still on the dry side, according to CHS Hedging.