[Weds]: The Hightower Report said if the economy and demand in the U.S. remains strong, beef should retain some of its recent strength… [Tues]: Boxed beef cutout values this afternoon were weak to lower… Choice fell $1.11… Select was down 65 cents… In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were 248 head sold live for $105-107 and 878 head sold dressed for $170-172…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 9/4/2019 8:31 AM
Cattle - The market has “overshot fair value,” moving to contract lows on Friday, The Hightower Report said. “If consumer demand is strong, the market may see a continued firm beef market and at least some stability in the cash market.”
The Hightower Report said if the economy and demand in the U.S. remains strong, beef should retain some of its recent strength. “This could leave the cattle market in a position to recover from the limited-capacity scare from mid-August,” they said.
Hogs bring back optimism
The market is waiting for a peak in offered beef production which may hit in the next couple of weeks, Allendale said. “This is both a seasonal issue, as weights are still rising, and also from the +5.2% year/year placements noted in the February to April,” they said.
Hog traders are optimistic once again, as limit up trade showed they believe there could be more Chinese buying on the way, Allendale said. The Chinese government is attempting to calm consumer fears, they said.
Tue 9/3/2019 4:50 PM
Boxed beef cutout values this afternoon were weak to lower on light demand and light offerings, the USDA said.
Choice fell $1.11 to $230.66/cwt.
Select was down 65 cents to $211.62.
In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were 248 head sold live for $105-107 and 878 head sold dressed for $170-172.
“The market experienced choppy and two-sided trade early in the session, but closed moderately higher on the day with an inside trading day for October and December cattle,” The Hightower Report said. “December cattle is back up near the middle of the Aug. 13 to present trading range after posting a contract low on Friday.”
The technical outlook seems to support higher prices. The market could be rising from oversold levels.
“Rising from oversold levels, daily momentum studies would support higher prices, especially on a close above resistance,” The Hightower Report said.
Hope in Chinese demand
The hog market opened higher and closed sharply higher, experiencing the highest close since Aug. 1, The Hightower Report said.
Chinese pork demand could drive prices higher, regardless of whether they import from the U.S. “Ideas that China import demand is significant and that China will be seeing a surge in pork imports from the world market helped to support,” The Hightower Report said.
Meanwhile a variety of factors were providing resistance for cattle markets.
“The excess beef supply made available from the higher slaughter numbers is a pressure point in itself,” Stewart-Peterson said. “Lower beef prices despite the seasonal increase in retail demand over the Labor Day weekend is bearish as well.”
Forecasts show little frost risk
Grain markets were searching for good news on Tuesday. They were mostly lower on a lack of supportive news following the long weekend, said Michaela White with CHS Hedging. “Extended forecasts are currently showing very little risk of an early frost,” she said.
Stewart-Peterson reported the “threat” of a long fall season may alleviate some concerns of a sharply lower crop.
“Most are still expecting a lower yield and production number on next week's Supply and Demand report, but traders are also expecting a reduction in usage which could offset a big portion of the production pull back,” Stewart-Peterson said.
“Corn traded lower today on a lack of supportive news after the long weekend,” Michaela White, with CHS Hedging, said. “Corn managed to break the contract lows set in May, and close below those lows. Poor export inspections this morning as well as spillover weakness from wheat added pressure to the market.”
The weather this week for the Midwest features mostly dry conditions and near- to below-normal temperatures, according to Jack Scoville with the Price Futures Group.
“The crop needs time to develop after being planted late this year, and futures should retain a weather premium as an early or even near normal first freeze date could cause additional losses,” Scoville said.
Beans traded lower most of the day before coming back to close near unchanged, Michaela White, with CHS Hedging, said.
“The early weakness was likely related to implementation of additional tariffs between the U.S. and China,” she said.
“The (pod) counts were very low and this was especially true for states east of the Mississippi River,” said Jack Scoville with Price Futures Group. “The weather has been better lately and more flowering to create more pods has been reported, but the market still expects less production when USDA releases its next update on Sept. 12.”
“Without much of any major production issues in the other wheat growing parts of the world, there is just too much inventory compared to current usage,” Stewart-Peterson said. In addition, commercials are making deliveries against the nearby September contracts for both of the winter wheat markets. This is pushing calendar spreads lower causing more weakness.
“The wheat market suffered today, with Kansas City and Minneapolis wheat setting fresh contract lows,” said Michaela White with CHS Hedging. “The Kansas City contract was the biggest loser today, followed by Minneapolis and Chicago. The weakness in wheat comes as harvest continues to add to large stocks, and demand remains poor.”