[Weds]: Cash cattle sales this week have been early, and running $110-$112… [Tues]: Boxed beef cutout values this afternoon were sharply higher… Choice was up $15.57… Select was $12.61 higher… In negotiated cash sales in Nebraska, the USDA reported 5,184 head sold live for $105-110, and 3,509 head sold dressed for $168-175. In Iowa-Minnesota, there were 537 head sold live for $109-110, and 920 head sold dressed for $169-175… “Grocery stores are likely buying as much beef as they can get their hands on in case packers get shut down,” Stewart-Peterson said. “In the meantime, there is no guarantee that any packers will be shut down, and as long as they stay open, they will make solid profits”…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 3/18/2020 8:43 AM
Cattle - Hedged cattle owners will post this week in the record book. Hedgers could sell cattle at $110 and cover April futures at $91 early week and still at $96 the basis is historically at record highs, according to The Cattle Report. Never have the differences between cash and futures been so prominently displayed to the world.
Brazil’s packers Minerva Foods and JBS will be halting operations in some Brazil plants per coronavirus precautions, Brugler Marketing reported. Cash cattle sales this week have been early, and running $110-$112.
Beef sales spike during pandemic
Americans are hunkering down and heading for the bunkers - a mass retreat to their homes taking supplies of food with them, according to The Cattle Report. The food stash includes lots of beef. No figures are readily available to gauge the beef sales versus other meats but anecdotal observations verify beef has earned its fair share and maybe more. Some of the beef will be eaten this coming week, and some will be frozen, and some will eventually be discarded from spoilage. The net effect will be a spike in consumption and an immediate call for more product. This past week's slaughter pulled back to 630,000 head from 647,000 the previous week.
Tue 3/17/2020 4:53 PM
Boxed beef cutout values this afternoon were sharply higher on good demand and heavy offerings, the USDA said.
Choice was up $15.57 to $239.93/cwt.
Select was $12.61 higher to $229.32.
In negotiated cash sales in Nebraska, the USDA reported 5,184 head sold live for $105-110, and 3,509 head sold dressed for $168-175. In Iowa-Minnesota, there were 537 head sold live for $109-110, and 920 head sold dressed for $169-175.
Grocery stores buying large amounts of beef helped support beef values and cattle markets. “Grocery stores are likely buying as much beef as they can get their hands on in case packers get shut down,” Stewart-Peterson said. “In the meantime, there is no guarantee that any packers will be shut down, and as long as they stay open, they will make solid profits.”
Feeder cattle were also surging Tuesday as the cattle market volatility continued.
“Live cattle are limit up on Turnaround Tuesday,” Barchart.com said. “Feeder cattle futures are also locked in expanded limit gains for midday. The volatility continues!”
Cattle markets respond to virus measures
Cattle markets moved higher in response to measures to control the coronavirus outbreak and surging beef values.
“The market appears to be settled a bit over increasing measures to control the spread of coronavirus,” Stewart-Peterson said. “Beef values also made a record jump yesterday.”
“While weights have been increasing contra-seasonal lately, there is no evidence yet that producers are backing hogs up in the country or that packers are shutting down,” Stewart-Peterson said. “Currently, the opposite is happening. With the sharp jump in pork values yesterday, packers will want to … produce as much pork as possible as long as they can.”
Government moves lift some markets
On Tuesday, markets were reacting to efforts to address the coronavirus situation and economic impacts. Soybeans traded higher, Steve Freed, with ADM Investor Services, reported.
“The market was oversold and followed higher financial markets,” Freed said. “Concentrated efforts by U.S. government and Central Banks to slow the spread of the coronavirus offered support.”
But overall, concerns about the virus and global demand remained. Concern that the worldwide spread of the coronavirus will slow global economy weighed on prices, Freed said.
“The advancing Brazil harvest, their lower prices and lack of China demand for U.S. soybeans also offers resistance,” he said.
“Corn futures traded sharply lower,” Steve Freed, with ADM Investor Services, said. “Word that a large U.S. trading firm had suggested a short position in corn triggered increase selling. Slow U.S. export pace also limits the upside in prices.”
Barchart.com reported Mato Grasso (Brazil) farmers have sold an estimated 73.4% of their second corn crop as of March 13, compared to only 52.9% sold through the same point last season. Corn exports through the first two weeks of March totaled 345,000 MT. The same time frame last year saw 826,700 MT.
“There was talk that the Argentina and Brazil soybean crop could be smaller than USDA estimates, which offered support,” Steve Freed, with ADM Investor Services, said. “There was also some talk that the fact Brazil and Argentina had closed their borders due to the spread of the virus raised speculation that their export paces could slow.”
Bean oil was higher Tuesday, bouncing back after dipping to lows not seen since 2006 on Monday. It posted a midday gain of 50 points, Barchart.com said.
“Wheat futures closed mixed. Higher financial markets offered support,” Steve Freed, with ADM Investor Services, said. “Trade was concerned about a drop in U.S. and global food demand due to the spread of the coronavirus. Concentrated efforts by world governments and Central Banks and new U.S. legislation to get wages to hourly earners offered support.”
A weaker ruble pushed Russian wheat exports higher, while U.S. wheat weekly shipments were down. Russian wheat exports reported by SovEcon were 30% higher week over week, Barchart.com said.