[Tues]: Weather didn’t create as much negativity in the cattle markets as it could have, Blue Line Futures said, but “from the technical perspective, it remains a tug-of-war match between the bulls and the bears… [Mon]: Boxed beef cutout values this afternoon were firm to higher… Choice was up 51 cents… Select rose $1.68… In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were no reportable live sales, and 331 head sold dressed for $199-200. “Traders have been hopeful that the cash market would remain in an uptrend into early 2020; however, prices have been steady,” the Hightower Report said… Beef values continue to be choppy…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 1/14/2020 9:21 AM
Cattle - Weather didn’t create as much negativity in the cattle markets as it could have, Blue Line Futures said, but “from the technical perspective, it remains a tug-of-war match between the bulls and the bears,” they said. For the February live cattle contract, they said resistance will stay at $127.225-127.90.
The Hightower Report looked at the April cattle contracts, noting that resistance is being found at the $127.90-$128.55 range. The market will be looking to hold support at $126.62 and $125.80, they said.
Cash important for a pork rally
The lean hog market has been staying in a downtrend as traders wait for Chinese demand and sales to be realized in the price structure. One item the Hightower Report is keeping an eye on Is a “sustained rally” in pork cutout values, which would support cash markets. They said the market “will need help from pork cutout values to form a low.”
Meanwhile, the cattle market remains in a consolidation phase, The Hightower Report said, and some weakness in the beef market will be needed “in order to expect lower cash trade ahead.”
Mon 1/13/2020 4:46 PM
Boxed beef cutout values this afternoon were firm to higher on moderate to good demand and moderate offerings, the USDA said.
Choice was up 51 cents to $210.55/cwt.
Select rose $1.68 to $208.23.
In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa-Minnesota, there were no reportable live sales, and 331 head sold dressed for $199-200.
“Traders have been hopeful that the cash market would remain in an uptrend into early 2020; however, prices have been steady,” the Hightower Report said. “February cattle are trading at a premium to the cash market, so traders await higher cash trade in order to rationalize the current price.”
Beef values continue to be choppy. “A few live cattle traded in Nebraska on Friday afternoon very slightly higher than the previous week’s average. Still, the numbers were light enough to not attract a wave of new buyer interest. Beef values have been in a choppy trend lately, making their highest close on Friday since Dec. 26.”
Cattle, hogs down to open week
It was a fairly quiet day for cattle, with traders watching for more cash market activity. “April cattle closed lower with a relatively quiet range and an inside trading day,” the Hightower Report said. “Traders are still waiting for more activity in the cash market, but the small amount of trade late last week was done at mostly steady prices.”
“February hogs opened slightly lower and closed sharply lower on the day and to the lowest close since Aug. 6,” the Hightower Report said. “The market continues to find pressure from higher than expected short-term supply, and less than expected impact on pork cut-out values for the increased export activity.”
Markets digesting reports to open week
Markets on Monday were still sorting out Friday’s USDA report and lower world ending stocks. “Friday’s USDA Supply and Demand report was considered mostly neutral, with higher ending stocks than anticipated, but world ending stocks were shown to be down 7% from last year,” Stewart-Peterson said.
“The U.S. and China are expected to sign the Phase One deal on Wednesday which is keeping prices supported even though China is not a major buyer of U.S. corn at this time,” Stewart-Peterson said. “The March contract opened directly at its 10, 20, and 100-day moving average levels today after failing to break above on Friday.”
“Corn traded higher today as the market disregards Friday’s report where the USDA raised the U.S. corn production,” Michaela White, with CHS Hedging, said. “Strength in corn is likely related to fund short covering. March closed above the 100-day moving average at $3.86 ½.”
Some analysts are thinking exports could be higher than estimated by the USDA, based on a few factors. “A few are still holding out hope that final U.S. exports may be higher than USDA estimate,” Steve Freed, with ADM Investor Services, said. “Key could be China demand and competition from South America and Black Sea.”
There were a variety of factors working against soybean markets Monday, including the lack of supportive news in the recent USDA report and the weather in Brazil. "Lack of bullish USDA news offered resistance,” Steve Freed, with ADM Investor Services, said. “Good weekend rains in Brazil also offered resistance.”
“Soybeans traded lower today, with March closing just below its 20-day moving average of $9.43,” Michaela White, with CHS Hedging, said. “Weakness in soybeans could be attributed to a falling Brazilian Real, which traded to its weakest point in a month. Additional pressure stems from South American weather that is favorable for their growing crop.”
“Wheat futures traded lower giving back most of Fridays gains,” Steve Freed, with ADM Investor Services, said. “Tight US, EU and Russia supplies has helped rally wheat futures esp versus corn. Some spread liquidation today is helping corn but weighing on wheat. Open interest in Chicago wheat futures has been going up since November.”
“Weekly US wheat exports were near 17 mln bu vs 20 last year,” Steve Freed, with ADM Investor Services, said. “Season to date exports are near 565 mln bu vs 495 last year. USDA left their estimate of US exports on Friday at 975 mln bu versus 936 last year. Key could be competition from EU and Black Sea.”