[Thurs]: … the Chinese sow herd was down nearly 40%... U.S. pork is on a record-setting production pace as average weights are up to an all-time high, “which suggests futher production difficulties ahead”… [Weds]: National carcass base fell 40 cents… Iowa-Minnesota carcass base down 11 cents… USDA reported carcass cutout values this afternoon fell 75 cents… Despite mixed closes today, packer margins are starting to come down over the past few weeks, Stewart-Peterson said, which may have a negative impact on demand, and therefore the cash cattle market. For the lean hogs, a trade deal being signed next Wednesday means export sales for the upcoming weeks will be very important…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 1/9/2020 8:31 AM
Lean hogs - The sow herd in China increased by 2.2% in December according to government officials, Allendale said. “A sign of improving production after a devastating disease slashed stocks,” they said. As of last October, the Chinese sow herd was down nearly 40%.
“It will be important for the bulls to see the market avoid a close under $74.52 for the April hogs,” The Hightower Report said, adding that such a close would turn the charts more bearish.
Cash cattle slowing up
The cash market’s uptrend “may be running out of steam” in the cattle markets as beef prices are pulling back, The Hightower Report said. “Cattle placements into feedlots have increased from a year ago over the past several months, and with cheap corn and good weather, beef production looks ample over the near term.”
Meanwhile, U.S. pork is on a record-setting production pace as average weights are up to an all-time high, “which suggests futher production difficulties ahead,” The Hightower Report said.
Wed 1/8/2020 4:36 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base fell 40 cents to $50.55/cwt.
National live was down 85 cents, to $39.48
Iowa-Minnesota carcass base down 11 cents to $51.02
USDA reported carcass cutout values this afternoon fell 75 cents at $72.74/cwt.
Hogs hit their lowest point since New Year’s Eve, Stewart-Peterson said, as the February contract had a “disappointing close” today after failing to break through resistance at the 10-, 20-, and 50-day moving averages.
“China seems to have the need to import lots more pork,” The Hightower Report said, as the U.S. has a record supply. “We would expect to see monthly export records in the months ahead.”
Hog exports expected to pick up
Despite mixed closes today, packer margins are starting to come down over the past few weeks, Stewart-Peterson said, which may have a negative impact on demand, and therefore the cash cattle market.
For the lean hogs, a trade deal being signed next Wednesday means export sales for the upcoming weeks will be very important, Stewart-Peterson said. U.S. pork exports in November hit a record high, despite slow sales to Mexico they said.
Grains missing volume
Volume is staying low in the markets through the mid-week mark, mainly due to the upcoming USDA report and tensions with the Middle East, ADM Investor Services said.
With a winter storm hitting Washington, weekly export sales reports are being delayed until Friday, Ami L. Heesch of CHS Hedging said.
Beneficial rains are hitting South America ahead of Friday’s report, Ami L. Heesch of CHS Hedging said. “Focus will be on the weather come April when Brazil’s 2nd corn crop is in its prime for production,” she said.
Stewart-Peterson said that Friday will likely show “adequate carryout” which is keeping new crop prices in check, but the market may be “at worst consolidating.” They added: “The longer-term trend, however, for new crop futures on December corn charts remains intact and that is still down.”
With thoughts that Iran might stand down after President Trump’s address, soybeans rallied after hitting a session low, ADM Investor Services said. However, normal rains are coming back into the forecast for South America’s two-week forecast.
“We expect that Friday’s reports, in a nutshell, will confirm adequate U.S. and world carryout,” Stewart-Peterson said. “Therefore, without weather, the market may struggle.”
Like soybeans, wheat futures turned higher today after the president’s address, ADM Investor Services said. Export sales are estimated to come in between 200-550 tonnes, which would compare to last week’s 313 tonnes. However, index funds are “expected to buy 14,000 KC wheat contracts and sell 6,000 Chicago wheat contracts” in a rebalancing period, which could help close the gap between the two.
Despite the U.S. being “snubbed” in the most recent Egyptian tender, and no U.S. spring wheat is in the mix for Japan’s weekly food tender, Ami L. Heesch of CHS Hedging said. “Prices drew strength from easing tension in the Middle East,” she added.