[Mon]: The cattle market is in “short-term free-fall,” The Hightower Report said. Open interest in a strong uptrend suggests traders are pressing the short side of cattle, they noted… [Fri]: Boxed beef cutout values this afternoon were lower… Choice fell $2.11… Select went down $2.53… In negotiated cash sales in Nebraska, the USDA reported 917 head sold dressed at $160-163, with 4,035 head sold live at $98-100. In Iowa/Minnesota, 1,638 head were sold live at $100-107, and 1,230 head were sold dressed at $160-165… Hurricane Dorian has created some difficulty moving cattle, leading to lower prices. Both live and feeder contracts fell hard among the facility shutdowns, Virginia McGathey of McGathey Commodities said…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 9/9/2019 9:53 AM
Cattle - The cattle market is oversold, The Hightower Report said, but there is no technical sign of a low. “Cash cattle weakness helped to drag the market lower last week, they said, and while the market looks cheap, the steep downtrend in cash cattle has kept sellers active and open interest is up sharply since mid-August.”
The cattle market also is dealing with a demand hit from “non-meat competition,” the Hightower Report said, adding to the market’s bearish tone.
Cattle, hogs dealing with uncertainties
The cattle market is in “short-term free-fall,” The Hightower Report said. Open interest in a strong uptrend suggests traders are pressing the short side of cattle, they noted.
In lean hogs, the trade market “continues to see signs that U.S. exports could pick up steam in the weeks and months just ahead,” The Hightower Report said. That has been counteracted by weakness in the cash markets, which has halted any sort of anticipatory rally.
Fri 9/6/2019 4:28 PM
Boxed beef cutout values this afternoon were lower on light demand and heavy offerings, USDA said.
Choice fell $2.11 to $227.31/cwt.
Select went down $2.53 to $201.94.
In negotiated cash sales in Nebraska, the USDA reported 917 head sold dressed at $160-163, with 4,035 head sold live at $98-100. In Iowa/Minnesota, 1,638 head were sold live at $100-107, and 1,230 head were sold dressed at $160-165.
For the week, December cattle is down 392 points, The Hightower Report said. Exports came in above average for the week ending on Aug. 29, hitting 18,100 tonnes, nearly 1,000 tonnes more than the 4-week average. “The market’s close below the 9-day moving average is an indication the short-term trend remains negative,” they said.
Hurricane Dorian has created some difficulty moving cattle, leading to lower prices. Both live and feeder contracts fell hard among the facility shutdowns, Virginia McGathey of McGathey Commodities said.
Dorian, trade affecting livestock
The Hightower Report said that ideas of trade talks being “a long way away” from being completed with China is helping pressure the market, as hogs traded at limit for multiple contracts today.
This week’s slaughter is estimated to be down from last week, due to the Labor Day holiday. However, compared to this time last year, Cattle came in 6,000 head lower (565,000), while hogs were 17,000 head fewer (2.204 mln).
Upcoming weather looks favorable
Forecasts are staying favorable, Joe Lardy of CHS Hedging said, but trade remains at the forefront of everyone’s minds. “No date has been set for trade talks between the U.S and China, but the talks are planned for early October,” Lardy said. “He also stated the talks could “heat up” but promised no prediction of the outcome of the meetings.”
Ag groups were disappointed in a recent biofuel reform package proposed by the Trump administration. The plan was to increase biofuels requirements, but a conference call with advocates said they want to “force larger refineries to make up for the exempted gallons through a process called ‘reallocation,’” a Reuters article said.
Today was a quiet day, Michaela White of CHS Hedging said. “There was little in the way of news, other than disappointing export sales and continued warm extended forecasts,” White said.
William Moore of the Price Futures group said gains from production and yield loss have bene offset by “demand destruction” from the trade war, as we move back to pre-planting prices. “We are too cheap – harvest will show very disappointing yields – a trade deal may become a political necessity,” he said. “Remember low prices cure low prices.”
“Diminishing hopes of a U.S./China trade resolution” are to blame for recent soybean action over the last few weeks, William Moore of Price Futures Group said. Eyes are on the next crop report, next Thursday, to see how yield estimates move.
Concerns about the upcoming WASDE report is also weighing on the soybean market, as Virginia McGathey said traders are expecting a bearish report. She said word there won’t be more exports to China is bearish as well.
Today saw some profit taking to end the week, Virginia McGathey of McGathey Commodities said. “I think what’s happening is we aren’t out of the woods yet,” she said, adding that we may have yet to find the bottom of the contracts yet.
“Wet weather across the northern plains will remain a problem for the HRS harvest,” Joe Lardy of CHS Hedging said. “Sprout damage is a concern in some areas and very low falling numbers are being reported.”