[Weds]: Traders believe that packer margins are strong enough to bring stability to the cash market, The Hightower Report said. That helped spark a higher turn yesterday… [Tues]: Boxed beef cutout values this afternoon were lower… Choice was down $1.57… Select fell 94 cents… In negotiated cash sales in Nebraska, the USDA reported no live sales, and 407 head sold dressed for $157. In Iowa-Minnesota, there were no reportable live sales, and 234 head sold dressed for $160… “Slaughter is beginning to lag behind last year's pace which may contribute to the weaker cash trade in futures markets,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 9/11/2019 8:45 AM
Cattle - Traders believe that packer margins are strong enough to bring stability to the cash market, The Hightower Report said. That helped spark a higher turn yesterday.
The recent break may have been overdone, The Hightower Report said, as the near-record packer profit margins will help stability the cash market and help spark the turn higher on Tuesday. “Fears of increasing supply ahead had kept sellers active, but the selling dried up when December cattle attempted to find new sellers under $99.”
China headlines livestock news
A new case of African Swine Fever was reported in China, this time in the northwestern region of Ningxia, Allendale said. Of the 226 hogs on the affected farm, 13 have died.
Meanwhile, Brazil is prepared to send more meat to China, after the Asian country approved 25 meat plants for export. Of those plants, 17 are beef and six are chicken, with one pork and donkey.
Tue 9/10/2019 4:38 PM
Boxed beef cutout values this afternoon were lower on light demand and moderate offerings, the USDA said.
Choice was down $1.57 to $225.38/cwt.
Select fell 94 cents to $200.98.
In negotiated cash sales in Nebraska, the USDA reported no live sales, and 407 head sold dressed for $157. In Iowa-Minnesota, there were no reportable live sales, and 234 head sold dressed for $160.
The technical outlook for cattle markets showed a negative trend in the short-term. Daily stochastics are trending lower but have declined into oversold territory, The Hightower Report said. The market's short-term trend is negative as the close remains below the 9-day moving average.
“Slaughter is beginning to lag behind last year's pace which may contribute to the weaker cash trade in futures markets,” Stewart-Peterson said.
Cattle stable, pork struggles
Cattle markets appeared to be stabilizing on Tuesday.
“While prices are not exactly springing off of yesterday's lows, cattle are at least stabilizing near long-term support,” Stewart-Peterson said. “A few feed lots caved to lower cash trade yesterday though prices should creep higher by the end of the week.”
Meanwhile, domestic pork prices continue to slide due to the surge in pork inventory and an export market that is not able to handle the increased supplies, at least at this time, Stewart-Peterson said.
Sales rumor gives soybeans a boost
Soybeans saw sources of optimism on a couple of fronts Tuesday.
“A rumor was working its way through the wires this morning that China is expected to agree to buy more U.S. ag products,” Barchart.com reported. “A private export sale of 138,000 MT of ’19/’20 soybeans were reported to Mexico by USDA this morning.”
Michaela White, with CHS Hedging, said corn drew strength from yesterday’s crop progress report that showed lower than anticipated crop conditions, as well as a crop that remains far behind on maturity. Additional strength comes from short covering in the market after reaching oversold levels.
The USDA announced an export sale of 278,200 tonnes of corn for delivery to Mexico during the 2019-2020 marketing year, reported Michaela White, with CHS Hedging.
“Support was tied to another flash sale announcement of 278,000 tonnes corn sold to Mexico this morning on top of yesterday’s 651,000 tonnes,” ADM Investor Services said. “Buying was also tied to yesterday’s surprise crop condition report coming in at 55% good/excellent down from last week's 58% and compared to last year's 68%.”
“Soybeans rocketed higher today, and the November contract closed above the 20-day moving average of $8.67 3/4,” White said. “The strength in soybeans comes as rumors circulate that China plans to buy more U.S. soybeans while they continue to engage in trade talks with the U.S.”
“The market surged higher at mid-session after headlines from the South China Morning Post stated that China is expected to buy more U.S. agricultural goods in hopes of a delay in a series of tariffs that will take effect in October and December and the easing of a supply ban against Chinese telecom giant Huawei Technologies,” ADM Investor Services reported.
“The wheat markets were higher across the board today,” White said. “The strength in wheat comes from spillover strength in corn, as well as short covering. Both December Chicago and December Kansas City closed above their 20-day moving averages of $4.71 1/4 and $4 respectively.”
World wheat offers have seen a slight uptick with concerns starting to develop with Australia and Argentina’s wheat production, ADM Investor Services said. ABARES lowered their 2019-20 Australian wheat production estimate to 19.1 mln tonnes compared to the latest USDA estimate at 21.0 mln.