[Mon]: The cattle market is oversold at the moment and “vulnerable to a corrective bounce,” The Hightower Report said. However, they noted that the expanding coronavirus issues remains a negative force on short-term demand for beef around the globe… [Fri]: Boxed beef cutout values this afternoon were lower on Choice and sharply lower on Select… Choice was down 81 cents… Select fell $2.07… In negotiated cash sales in Nebraska, the USDA reported 4,167 head sold live for $120-122 and 7,188 head sold dressed for $193-194. In Iowa-Minnesota, there were 2,223 head sold live for $119-124, and 895 head sold dressed for $189-193… “Cash cattle trading so far this week has been minimal as feedlots and packers have wide bid-ask ranges,” Barchart.com said…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 2/10/2020 8:42 AM
Cattle - The cattle market is oversold at the moment and “vulnerable to a corrective bounce,” The Hightower Report said. However, they noted that the expanding coronavirus issues remains a negative force on short-term demand for beef around the globe.
A current discount to the cash market “might help to support,” they added. “The market has short-term demand issues which could limit the recovery bounce and also a bearish tilt to the longer-term production outlook as second-quarter beef supply looks burdensome.”
Hogs staying optimistic
Despite some weakness in the stock market, hog strength seemed to offset trade on Friday, The Hightower Report said, with hopes for the Chinese market to step in soon. Production in the pork industry is up 8.1% from last year, they said, making it difficult for the market to absorb the supply in the domestic market.
African Swine Fever infections has now spread to the south of the Philippines, Allendale said, into areas that produce roughly one-third of the 12.8 mln pigs from the country.
Fri 2/7/2020 4:49 PM
Boxed beef cutout values this afternoon were lower on Choice and sharply lower on Select on light to moderate demand and offerings, the USDA said.
Choice was down 81 cents to $210.12/cwt.
Select fell $2.07 to $203.89.
In negotiated cash sales in Nebraska, the USDA reported 4,167 head sold live for $120-122 and 7,188 head sold dressed for $193-194. In Iowa-Minnesota, there were 2,223 head sold live for $119-124, and 895 head sold dressed for $189-193.
“The market is oversold and vulnerable to a corrective bounce, but traders remain concerned that the slowdown in restaurant and travel business will hold short-term demand lower, while increasing supplies into the second quarter are also seen as bearish forces,” the Hightower Report said. However, packer margins are still positive and export sales news has been positive.”
Cash trade was minimal, and slaughter was running ahead of last week’s pace. “Cash cattle trading so far this week has been minimal as feedlots and packers have wide bid-ask ranges,” Barchart.com said. “…The USDA estimated cattle slaughter for the week at 486,000 head through Thursday. That was 1,000 head more than last week.”
Cattle choppy, hogs higher
Cattle markets were choppy, with forces acting on both sides. “April cattle closed just slightly higher on the day after choppy and two-sided trade,” the Hightower Report said. “Strength in the hog market helped to offset weakness in the stock market and concerns over short-term demand for beef given the expanding virus issues around the world.”
Strong export numbers helped drive hog markets higher Friday. “April hogs closed sharply higher on the day and pushed up to the highest level since Jan. 30,” the Hightower Report said. “The market is still being supported by very strong monthly exports for the month of December and a huge sales book for 2020 for China.”
Market watching weather, coronavirus
“The grain markets have been trading rangebound from non-threatening weather in South America and the ongoing spread of the coronavirus throughout the Chinese provinces,” Ami Heesch, with CHS Hedging, said. “While China allegedly pledges to honor the increased purchases of US goods, they have not yet stepped up to the plate.”
“The U.S. Agriculture Department's closely watched monthly supply and demand forecast will not include Phase 1 trade details about China's purchase commitments from the recently inked deal, the agency's top economist said,” ADM Investor Services said. “USDA analysts have not been told buying targets for each farm product included in the trade deal.”
“The corn market traded in positive territory on a bout of short covering ahead of the weekend,” Ami Heesch, with CHS Hedging, said. “The March contract traded in a nine-cent trading range this week. Fresh news was light and optimism over Phase One Trade Agreement purchases swayed back and forth all week. Non-threatening weather in South America weighed on prices.”
Corn sales were running behind last year’s pace and the USDA’s projections, as analysts watched for fresh positive news to support corn markets. “For the week ended Jan. 30, U.S. Corn sales are running 29% behind a year ago, shipments 42% behind with the USDA forecasting a 14% decline,” ADM Investor Services said.
"Soybean prices turned higher on a bout of technical buying and short covering,” Ami Heesch, with CHS Hedging, said. “The March contract saw a nine-two cent drop from Jan 2 to Feb 3 (9.61-8.68 ¾). The soybeans appear to be stuck in a 10-20 cent range from near record to record harvest in Brazil to Chinese optimism (that they will prove true on their trade deal).”
“The South American weather forecast for Brazil has rainfall amounts differing for growing regions over the next 6 to 10 days,” ADM Investor Services said. “The Argentine weather forecast has things quiet into much of next week with another front seen bringing light to moderate rainfall to most growing regions by the end of next week.”
“For the week ended Jan. 30, U.S. all wheat sales are running 19% ahead of a year ago, shipments up 29% with the USDA forecasting a 4% increase on the year,” ADM Investor Services said. "By class, HRW wheat sales are up 41%, shipments 61% ahead with a USDA forecast of a 16% increase.”
"The wheat market traded higher on a bout of short covering ahead of the weekend,” Ami Heesch, with CHS Hedging, said. “It has been a tough go for the wheat market this week. Demand is slow, optimism is waning over possible Chinese demand for US wheat and the winter wheat crop is getting beneficial moisture.”