[Thurs]: Hog weights in Iowa/Southern Minnesota markets are dropping as of last week, with the hog weight report showing a drop of 0.4 lbs from the previous week at 286.9 lbs… China is trying to take measures to put their lean hog markets back to normal levels by the end of 2020, The Hightower Report said. “This is a high goal, and if accomplished, it is a longer-term bearish force,” they said… [Weds]: National carcass base down $3.07… Iowa-Minnesota carcass base down $3.33… USDA reported carcass cutout values this afternoon fell $2.83… There was optimism early in the lean hog trading, but selling emerged as the day went on, leaving many hog contracts lower today. The market is still “extremely oversold” according to Stewart-Peterson, but right now they noted there is “just not a sense of urgency for speculators to own hogs at this time”…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 2/6/2020 8:35 AM
Lean hogs - If the contract lows don’t hold for the April lean hog contract, the market could end up testing the marks around $59.72, The Hightower Report said. The oversold condition of the market has hogs potentially ready for a bounce back up after Monday’s trade, but pork values are staying in a downtrend.
Hog weights in Iowa/Southern Minnesota markets are dropping as of last week, with the hog weight report showing a drop of 0.4 lbs from the previous week at 286.9 lbs. “Year over year, last week's weight was 0.5% over last year,” Allendale said. “That is an improvement over the +1.1% numbers from the prior week.”
Cattle outlook continues to be bearish
Cattle is still trading in long liquidation at the moment, The Hightower Report said, as open interest is down 15.2% over the last 10 trading sessions. “The China tariff news this morning is a positive longer-term factor for the market as China could eventually become a significant importer of U.S. beef,” they said, noting that that could take time to materialize.
For lean hogs, China is trying to take measures to put their lean hog markets back to normal levels by the end of 2020, The Hightower Report said. “This is a high goal, and if accomplished, it is a longer-term bearish force,” they said.
Wed 2/5/2020 4:54 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down $3.07 to $50.07/cwt.
National live was down 9 cents to $41.45
Iowa-Minnesota carcass base down $3.33 to $49.15
USDA reported carcass cutout values this afternoon fell $2.83 to $65.30/cwt.
After Monday’s key reversal, technical action has been sluggish, The Hightower Report said. “The market is seeing the continued weakness in the pork product market over the last couple of days and fears that China’s backing away from making its purchases as factors keeping the market on the defensive.”
Hightower noted that momentum studies “are still bearish,” despite the oversold levels, but if any sort of reversal happens it could be supported. “The market’s short-term trend is negative as the close remains below the nine-day moving average.”
Hogs give up early gains, cattle falling
There was optimism early in the lean hog trading, but selling emerged as the day went on, leaving many hog contracts lower today. The market is still “extremely oversold” according to Stewart-Peterson, but right now they noted there is “just not a sense of urgency for speculators to own hogs at this time.”
A positive for the currently falling cattle futures could be found in recent gains from the stock market, Stewart-Peterson said. A few gaining days in a row “could positively impact retail beef prices,” they said, despite the charts looking technically weak.
China reports helping soybeans
Reports that China has stepped up soybean purchases helped boost the market higher Wednesday. The Hightower Report says most of those originated in South America, however. The continued strength of the U.S. dollar is also impacting the bean market.
Good weather in South America is “overwhelming talk that the USDA could increase corn demand” for next week’s Supply and Demand report, says Stewart-Peterson. March corn prices were stopped yesterday at its 50-day moving average resistance level, and a test of that price failed this morning.
March corn closed down 1 ½ cents at $3.80 ¾, while May corn was down 1 ½ cents. Hightower says reports of progress in containing the coronavirus outbreak is positive news, but says reports China may release 2.96 MT of corn from state reserves is dampening some of the optimism.
Barchart.com says tighter ethanol stocks were reported for the week. The biggest reduction was recorded on the East Coast. Ethanol prices were 2.9 percent higher than a week ago, while gasoline prices were 2.2 percent lower than the previous week.
March soybeans were up ½ cent at $8.80, while May beans were up ½ cent at $8.93. Hightower says meal prices recorded a new contract low, but finished with moderate losses. Soybean oil prices continued their upward trend with a third consecutive sizable gain.
Stewart-Peterson says there are reports that China “will make food and feed availability a top priority moving forward.” This should bode well for U.S. beans, they said, although China continues to buy beans from South America.
March wheat closed up 4 ¾ cents to $5.62, just under two cents below the contract high. Hightower says tight near-term supplies remain “a source of support” for wheat prices. Additionally, the potential of Russian export restrictions “provided another boost to sentiment.”
A strong U.S. dollar seems to be dampening the enthusiasm of some traders, says Stewart-Peterson. They said “most traders still like the fundamental picture...with the most winter wheat plantings this year since 1909.