[Tues]: The shock of the cattle down limit and a huge clash of China demand for imports against an attempt to avoid U.S. pork should keep the trade volatile, according to The Hightower Report… [Mon]: National carcass base down $2.02… Iowa-Minnesota carcass base down $2.66… USDA reported carcass cutout values this afternoon fell 25 cents… The market gave back all of its gains today in lean hogs, as the limit-down move in cattle held December hogs lower, The Hightower Report said. “A firm tone for pork cut-out values in the U.S. and a surge in pig prices from China helped to support the market into the midday”…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 8/13/2019 9:19 AM
Lean hogs - The shock of the cattle down limit and a huge clash of China demand for imports against an attempt to avoid U.S. pork should keep the trade volatile, according to The Hightower Report.
Serbia has reported four suspected outbreaks of African swine fever among backyard pigs, according to Allendale.
Livestock markets volatile
The cattle market plunged to limit-down closes Monday but that helped push pork higher, according to The Hightower Report. Cattle's tumble yesterday is due to the fire at a Tyson slaughter plant, causing it to shut down indefinitely.
Smithfield launched a line of soy-based meat products, joining an increasing number of companies providing meat alternatives, according to Allendale.
Mon 8/12/2019 4:31 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down $2.02 to $68.85/cwt.
National live fell 38 cents to $56.28
Iowa-Minnesota carcass base down $2.66 to $69.71
USDA reported carcass cutout values this afternoon fell 25 cents at $90.19/cwt.
There is still a bearish sentiment across the complex for lean hogs, leading to limited gains and more losses in the contracts. “The pressure on the futures will remain as the beef futures pick back up,” she said. “We have overshot our objective in the hog market so much that we expect that it might turnaround,” but McGathey said anything could happen based on the current state of the cattle markets.
With cattle markets trading down today, that muted the buying influence of the “positive technical picture” in lean hogs today, Stewart-Peterson said. “The technical picture has begun to look a bit supportive as well, with the best traded Oct contract breaking through nearby support this morning at the 10-day moving average level.”
Tyson plant fire hurts cattle
Both live and feeder cattle finished limit down today. This came after a fire at the Tyson Foods plant pushed the market down, Virginia McGathey of McGathey Commodities said. Expanded limits tomorrow could make it a “wild ride,” Virginia McGathey of McGathey Commodities said.
The market gave back all of its gains today in lean hogs, as the limit-down move in cattle held December hogs lower, The Hightower Report said. “A firm tone for pork cut-out values in the U.S. and a surge in pig prices from China helped to support the market into the midday.”
Corn headlines tumble in grains
Corn finished the day limit down after the midday reports showed a slight reduction in acres, but a 3.5 bushel per acre increase in yield projections, stunning traders. “I don’t think anyone expected the USDA to take the yield up that much. I don’t have a problem with the area estimates, because with a re-survey they should have a good handle on those. I don’t see where they think we are getting that yield out of the crop,” Jack Scoville of the Price Futures Group said.
After the close of the markets, the crop progress report was released from the USDA, showing corn condition held steady from last week, sitting at 57% Good/Excellent. Soybeans also held steady from last week, at 54% Good/Excellent.
“Total production and yield were both above trade expectations,” Ami L. Heesch of CHS Hedging said. “Big carryouts and slowing demand is expected to wear on corn prices going forward.”
“What’s the expectation for demand over the next couple of months? That’s really going to tell the tale of if we see the drop continue tomorrow,” Virginia McGathey of McGathey Commodities said. She added that expanded limits tomorrow could bring some added volatility to trade.
Soybean numbers were lower despite numbers in today’s report being relatively positive. End and world stocks were lower than the July number, but corn’s weakness weighed on prices Steve Freed of ADM Investor Services said.
Soybeans saw a decrease in acreage as well, much of the selling pressure can be attributed “buying the rumor, selling the fact,” Virginia McGathey of McGathey Commodities said. “We thought there might be a little bit of a bump there, but it just didn’t happen.”
With increased stocks and production forecasts, what saw 25 cent losses in many of the upcoming contracts. Wheat is expected to be at 1.98 billion bushels for production, and 1.014 billion bushels of ending stocks, both well above expectations. Weakness in corn and soybeans also pressured the market, Ami L. Heesch of CHS Hedging said.
The decline in wheat prices started before the reports came out today, as open interest was “quickly collapsing,” ahead of the report, Stewart-Petersons said. That defensiveness continued as the prices continued into the report and after.