[Weds]: … despite a “corrective break,” export demand is expected to be on the rise, The Hightower Report said. That keeps the February contract in an uptrend… [Tues]: National carcass base was 45 cents higher… Iowa-Minnesota carcass base was down 16 cents… USDA reported carcass cutout values this afternoon were up $1.56… Pork values were up on expectations exports will increase, although market gains could be limited. “The turn higher in pork values seems to be indicating that export business has begun to pick up,” Stewart-Peterson said… China is seeing increasing pork imports. “China's pork imports surged in August to 162,935 tonnes, a 76-percent year-on-year increase,” the Hightower Report said…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 10/2/2019 8:34 AM
Lean hogs - The December hog contract is still holding a “huge” premium to the cash market, The Hightower Report said, so a jump in pork prices will be needed to rationalize prices.
However, despite a “corrective break,” export demand is expected to be on the rise, The Hightower Report said. That keeps the February contract in an uptrend and any breaks “appear to be buying opportunities.”
Cattle may be at short-term peak
In an effort to curb African Swine Fever, South Korea said they are temporarily suspending civilian tours of the border with North Korea, Allendale said. They have suspicions some of their cases of the disease came from North Korea.
A “short-term peak” may be in place for the cattle market, according to the Hightower Report. “Even if the trend has turned up, the market may be in need of a correction,” they said.
Tue 10/1/2019 4:29 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was 45 cents higher to $49.36/cwt.
National live was up $1.24 to $39.17
Iowa-Minnesota carcass base was down 16 cents to $49.63
USDA reported carcass cutout values this afternoon were up $1.56 to $75.29/cwt.
Pork values were up on expectations exports will increase, although market gains could be limited. “The turn higher in pork values seems to be indicating that export business has begun to pick up,” Stewart-Peterson said. “…The steep premium of futures prices to the cash market is going to be the main factor keeping gains limited.”
China is seeing increasing pork imports. “China's pork imports surged in August to 162,935 tonnes, a 76-percent year-on-year increase,” the Hightower Report said. “China imported over 1.16 million tons of pork in the first eight months of this year, up 40.4 percent from the previous year.”
Hogs drop on premium to cash
“The (hog) market closed sharply lower on the day and even hit limit down late in the day before closing sharply lower on the day,” the Hightower Report said. “The big premium to the cash market and ideas that the Hogs and Pigs report was bearish enough from a supply perspective to allow for the cash/futures relationship to narrow helped to pressure.”
Cattle were down on overbought conditions and the technical picture. “December cattle experienced an outside-day down from an overbought condition and received a sell signal crossover for slow stochastics,” the Hightower Report said. “February cattle closed moderately lower on the day after first seeing a rally up to the highest level since Aug. 5.”
Prices continue rise
“The ag markets were mostly higher today on leftover fuel from USDA’s stocks data released yesterday,” Ami Heesch, with CHS Hedging, said. “Weather continues to be a concern most everywhere with the US remaining captive of cool wet conditions and South America strapped with mostly dry weather with chances for moisture in the southern areas.”
“Continued rain in the forecast for most of the Midwest the next three days would suggest limited or no harvest pressure during that time,” Stewart-Peterson said. “Additionally, with humid and warm conditions, we hear from producers suggesting the crop is not maturing at a quick pace.”
Corn markets were higher on concerns about the crop. “Corn prices continued their move to higher levels on crop concerns and left over fuel from yesterday,” Ami Heesch, with CHS Hedging, said. “Crop development should continue slowly with the fall season among us and lack of measurable heat units.”
“US farmers have not yet been aggressive sellers of their 2018 inventory, 2019 crop that is in the ground or the carry in futures to the 2020 crop,” Steve Freed, with ADM Investor Services, said. “Most do not want to sell corn until they get into the field and see what their 2019 crop yield is. Some feel that the US 2019 crop could be closer to 13,600 mln bu vs USDA 13,799.”
Soybeans drew support from a variety of sources. “Soybean prices traded higher again on hopes for more Chines soybean business this week and unfavorable weather conditions for resuming harvest activity,” Ami Heesch, with CHS Hedging, said. “Prices drew additional support from yesterday’s USDA stocks data.”
The soybean crop continues to run behind schedule. “Yesterday’s Crop Progress report again confirmed the crop is well behind schedule with 55% dropping leaves versus a 5-year average of 76%,” Stewart-Peterson said. “Harvest at 7% trails the 5-year average of 20%, and with more wet weather on tap, this number will likely continue to fall behind.”
“The wheat market was mixed with Mpls taking second fiddle to the strength in the row crops,” Ami Heesch, with CHS Hedging, said. “KC saw weakness on planting progress and Chicago garnered support from the corn market… The spring wheat harvest may take a while to get going again after the weekend rain and snow events have saturated fields.”
World wheat prices did not see a similar rally. “World wheat prices also did not follow US futures rally which suggest US export prices are a premium to other origins,” Steve Freed, with ADM Investor Services, said.