[Tues]: Continued weakness in cutout values “continues to be a drag,” The Hightower Report said. For the bulls to take charge of the market, they need to see increasing pork values… [Mon]: National carcass base was up 9 cents… Iowa-Minnesota carcass base rose 34 cents… USDA reported carcass cutout values this afternoon were up 21 cents… “Carcass values are at their lowest level since March 2019 despite huge sales of pork to China this year vs. the average pace,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 2/11/2020 8:31 AM
Lean hogs - Wholesale pork prices were the lowest of the year so far, at $64.81, Allendale said. Virus concerns, with coronavirus continuing to be an issue in China, and oversupply in the U.S. production continue to be major hurdles.
Continued weakness in cutout values “continues to be a drag,” The Hightower Report said. For the bulls to take charge of the market, they need to see increasing pork values. “April hog support comes in at $63.92 with $68.47 and $70.25 as resistance. Consider buying,” The Hightower Report said.
Cattle 'vulnerable' to liquidation, hogs probing for low
April cattle contracts “look vulnerable to some additional long liquidation selling,” The Hightower Report said, as there is no sign of strength in the beef market. The market continues to be oversold, but traders can’t seem to shake the pressure of the long liquidation trend amidst uncertain demand.
The hog market “is probing for a short term low” at the moment, The Hightower Report said. Production continues to weight on the markets, despite Chinese prices continuing to rise “mainly from the inability of buyers to get product to their location,” The Hightower Report said.
Mon 2/10/2020 4:40 PM
In weighted average negotiated prices for barrows and gilts, USDA reported:
National carcass base was up 9 cents to $50.31/cwt.
National live was 10 cents higher to $39.48
Iowa-Minnesota carcass base rose 34 cents to $49.65
USDA reported carcass cutout values this afternoon were up 21 cents to $65.02/cwt.
“The export sales pace is very strong and could increase in the months just ahead, as China still has the need for a significant amount of pork,” the Hightower Report said. “The issue has been the pork cut-out values trading down at the lowest level since March. Pork cut-out values at midsession today came in at $67.67, up $4.37 on the day.”
“Carcass values are at their lowest level since March 2019 despite huge sales of pork to China this year vs. the average pace,” Stewart-Peterson said. “China pork prices are continuing their rally and were up 2.75% overnight. Still, traders are worried about the longer-term demand impacts due to the coronavirus.”
Hogs down on high production
“April cattle closed sharply lower on the day and experienced the lowest close since Oct. 1,” the Hightower Report said. “While the market is oversold and may be due for some type of a technical bounce, the lower and sloppy action in the beef market, plus continued concerns of a slowdown in restaurant business and travel, has helped to pressure the market.”
Hogs were down on production concerns.
“April hogs closed sharply lower on the session and back down near Friday’s lows,” the Hightower Report said. “Weakness in pork cut-out values continues to be a drag, as the market attempts to absorb much higher than expected pork production in the U.S.”
Soybeans gain on quiet day
“Quiet day in the ag markets ahead of the USDA’s monthly Supply and Demand report tomorrow at 11 a.m.,” Ami Heesch, with CHS Hedging, said Monday afternoon.
While the U.S. dollar continued to show decent strength since the start of February, Heesch reported the news Monday was the U.S. and China said they would honor their respective commitments in the phase one trade agreement.
“Soybeans and soymeal traded higher,” Steve Freed, with ADM Investor Services, said. “There were rumors that China may have bought 2-3 cargoes of U.S. new-crop soybeans. Word that the world’s largest shipper of soymeal filed for bankruptcy in Argentina may have also helped soymeal gain on soy oil."
Corn markets drifted lower on Monday as traders waited for fresh good news to lift them.
“Corn prices traded lower on a bout of profit taking after last week’s strength,” Ami Heesch, with CHS Hedging, said. “The corn market appears to be rangebound and in need of some fresh supportive news.”
“South American weather has been non-threatening, the U.S. dollar is trading at its highest level since Oct. 10, and the Brazilian real made new all-time lows this morning,” Stewart-Peterson reported. “Many traders are also worried that while U.S. corn ending stocks may come in a bit lower on tomorrow’s report, global ending stocks are expected to grow.”
Soybean prices shook off midsession pressure and climbed up to a new one and a half week high, but lost momentum late in the day to finish Monday's trading session with only a modest gain, the Hightower Report said.
“Reports of Chinese officials telling the U.S. that they will meet their phase one ag purchase targets after delay provided the soy complex with support,” the Hightower Report said.
Improving demand for soybeans helped push the market higher, Ami Heesch, with CHS Hedging, said.
“Prices drew support from China’s announcement that they would look to reduce current tariff rates on some U.S. ag products, including soybeans, by the end of this week,” she said.
“Wheat prices trade on the defensive without a lot of fresh supportive news,” Ami Heesch, with CHS Hedging, said. “There seems to be enough routine business around to keep exports doing fairly well, despite the fact that China has reportedly been a big buyer of Canadian, Australian and French wheat over the past weeks.”
Overall wheat exports for the season were running ahead of last year’s pace, Steve Freed, with ADM Investor Services, said.