[Fri]: …Traders remain confident in the strong demand for beef as the cattle market remains in a consolidation mode, which started in mid-November, The Hightower Report said this morning… [Thurs]: Boxed beef cutout values this afternoon were steady to firm… Choice rose 46 cents… Select went up 15 cents… In negotiated cash sales in Iowa-Minnesota, the USDA reported 106 head sold dressed at $197-198, with no live sales. There were no reported sales in Nebraska… “Cash continues to grind higher, but the futures market is continuing to grind sideways,” Oliver Sloup of Blue Line Futures said… “Traders await cash market news as futures continue to hold a premium to last week’s cash market,” The Hightower Report said…

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Fri 1/10/2020 8:45 AM

 

Cattle - Cattle markets are remaining firm this morning, ahead of USDA export market reports today, said Brugler Marketing.

 

“The Cattle report coming up may clarify not just an ending of five straight years of expanding beef cow numbers. It could even show a small year over year decline,” Allendale said.

 

Traders remain confident in the strong demand for beef as the cattle market remains in a consolidation mode, which started in mid-November, The Hightower Report said this morning.

 

ASF threat nearing new areas

 

The World Organization for Animal Health for animal health reported 55 findings of African swine fever (ASF) in Poland near the border with Germany last month. “This is further evidence that ASF is nearing a major EU producer/exporter. The closest finding was 18.6 miles from the German border, Allendale said.

 

Meanwhile China, a country still reeling from ASF, announced the country would continue to release pork from government stocks both before and after the Chinese New Year. Since December 12 the government has released 130,000 metric tons into the domestic market. That’s just a “small portion of their needs”, Allendale said.

 

According to the Hightower Report, for longer term beef prices, the bulls are counting on supportive forces namely “hope” that China will eventually be a strong buyer of U.S. beef and eventually Australian beef supplies will tighten. China currently buys little U.S. beef, and Australia is in liquidation mode in the short-term, The Hightower Report said.

 

Thu 1/9/2020 4:24 PM

 

Boxed beef cutout values this afternoon were steady to firm on moderate to fairly good demand and heavy offerings, USDA said.

 

Choice rose 46 cents to $209.96/cwt.

Select went up 15 cents to $206.68.

 

In negotiated cash sales in Iowa-Minnesota, the USDA reported 106 head sold dressed at $197-198, with no live sales. There were no reported sales in Nebraska.

 

“Cash continues to grind higher, but the futures market is continuing to grind sideways,” Oliver Sloup of Blue Line Futures said. “From the technicals perspective, we are in a range.” He said there may be value in selling up for traders. “The cash market is the thing to keep an eye on.”

 

All trade since Tuesday has been in Monday’s trading range, The Hightower Report said. “Open interest remains high and fund traders remain with a large net long position,” they said. “This leaves the market vulnerable to increase selling pressures if support levels are violated.”

 

Cash markets impacting futures

 

Selling emerged in the lean hog market, which hit its lowest levels since Dec. 10 today. “Sluggish cash markets and weakness import cutout values in the face of strong demand for pork from China is seen as a bearish development,” The Hightower Report said.

 

April cattle is dealing with some choppy and two-sided trade in the market, as it closed higher today. “Traders await cash market news as futures continue to hold a premium to last week’s cash market,” The Hightower Report said.

 

China phase 2 may wait until November

 

The market continued to prepare for the upcoming USDA release tomorrow morning, Ami L. Heesch of CHS Hedging said.

 

With Phase 1 of the China/U.S. deal expected to be signed next week, Reuters reported today that a Phase 2 deal may not be finished until November. President Trump indicated waiting until after the November elections, he may be able to make a better deal.

 

Corn

 

“We are trending a little bit lower going into tomorrow’s USDA report,” Oliver Sloup of Blue Line Futures said. “$3.77-$3.80 is a must hold for the bull camp.” Sloup said a friendly report might spur some short covering.

 

Selling pressure continued as there is a lack of supportive news ahead of tomorrow, Ami L. Heesch of CHS Hedging said. “Brazil’s key state of Rio Grande Do Sul is expected to see some much needed moisture in the next few days,” she added.

 

Soybeans

 

“We like soybeans,” Oliver Sloup of Blue Line Futures said, but said people don’t have to be a buyer right now. “If we are to break lower here, that could lead to a low of $9.20-9.25, at that point I think there’s value in soybeans.”

 

Buying wheat and selling beans became a bigger trend as the day progressed, Stewart-Peterson said. They noted that was largely because soybeans may not see much support from tomorrow’s report. “The market appears to be content to consolidate and will likely take direction after major news events over the next week.”

 

Wheat

 

“There was active selling against today’s rally in the wheat market,” Ami L. Heesch of CHS Hedging said. The market saw renewed buying interest on ideas of a reduction in U.S. winter wheat seedings and higher global prices.

 

“Tomorrow’s report will provide some expectation for winter wheat acres as not only will quarterly grain stocks and supply and demand estimated, but also winter wheat seedings,” Stewart-Peterson said. “KC wheat continues to pick up ground on generally dry conditions in the western Plains and a stronger technical picture after today with prices holding the 10-day moving average.”

 

iowafarmertoday.com