[Thurs]: Short-term demand has given the cattle market “a strong pull,” The Hightower Report said. However, the concern is there is more than enough beef to meet these needs. “Once the pipeline is full, moving the extra beef could be difficult”… [Weds]: Boxed beef cutout values sharply higher… Choice up $7.31… Select up $9.18… In negotiated cash sales in Nebraska, the USDA reported live FOB sales of 4,726 at $111.05, with dressed delivered sales of 5,153 at $175.00. In Iowa, live FOB sales of 6,600 were reported at $111.28, with dressed delivered sales of 3,688 reported at $174.78… Stewart-Peterson says cattle markets have found some support lately from the jump in beef values though it is unclear how the market can sustain these kinds of gains, especially if plants get shut down. At this point, there are no reports of this happening…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 3/19/2020 8:56 AM
Cattle - Short-term stockpiling has helped the beef markets as values have seen good demand and heavy offerings, Allendale said. That has cutout values “sharply higher” at the moment.
Expect the market to remain “extremely volatile,” The Hightower Report said, and the short-term jump in beef prices is “temporary.” Hightower has close-in support for April cattle at $91.07, with resistance at $101.87 and $104.40.
Cattle supply "more than enough" for worries
Short-term demand has given the cattle market “a strong pull,” The Hightower Report said. However, the concern is there is more than enough beef to meet these needs. “Once the pipeline is full, moving the extra beef could be difficult.”
Lean hog supply typically tapers off this time of year, The Hightower report said, but “there is still the possibility of very strong sales to China.”
Wed 3/18/2020 4:45 PM
Boxed beef cutout values sharply higher on good demand and heavy offerings, USDA reported
Choice up $7.31 to $247.24/cwt.
Select up $9.18 to $238.50/cwt.
In negotiated cash sales in Nebraska, the USDA reported live FOB sales of 4,726 at $111.05, with dressed delivered sales of 5,153 at $175.00. In Iowa, live FOB sales of 6,600 were reported at $111.28, with dressed delivered sales of 3,688 reported at $174.78.
June live cattle closed down $3.82 at $85.92, while May feeder cattle closed down $3.32 at $108.52. Hightower says the cattle market remains extremely volatile “as traders see the short-term jump in the beef market as temporary.” Many believe grocery stores will have plenty of beef once they restock.
Stewart-Peterson says cattle markets have found some support lately from the jump in beef values though it is unclear how the market can sustain these kinds of gains, especially if plants get shut down. At this point, there are no reports of this happening.
Beef prices rise, futures fall
Beef values have rocketed higher in recent sessions, currently trading at their highest levels since mid-November. Stewart-Peterson says this is likely due to grocery stores getting their hands on all the beef they possibly can in case the supply chain shuts off due to the spread of coronavirus. However, those prices weren't able to be seen in the futures market, as cattle turned lower again.
The Hightower Report says traders will closely monitor hog weights to see if numbers are backing up in the country. Recent price hikes for pork should boost packer margins higher. Momentum studies are rising from mid-range, which could push prices higher.
Ethanol margins continue to drop
The drop in energy prices has also dropped US ethanol margins, says ADM Ag Market View. “The margins are so in the red that there is talk that US plants could soon close and take down time. Ethanol plants have also either dropped basis or have no bids,” they said.
Hightower says soybean meal prices were strong Wednesday, with traders thinking sharply lower ethanol demand will reduce the supply of distillers grains. This would likely increase demand for soybean meal. Soybean momentum studies are declining, but have fallen to oversold levels, says Hightower.
May corn finished down 8 ¾ cents at $3.35 ¼, while July corn closed down 8 ¼ cents at $3.41 ¾. Hightower says corn prices reached a new contract low today, adding a sell-off in energy markets continues to be a major source of pressure on corn. Analysts expected ethanol demand to weaken.
Weekly US corn export sales are estimated near 600-1,000 mt. ADM Ag Market view says prices are attractive but there is no sense that Crude oil prices area near a bottom of the spread of the virus is over. US corn export prices are competitive to Argentina.
May soybeans closed up 1 ¼ cents at $8.25 ½, while July beans were up 1 ¾ cents at $832 ¾. Hightower says the market saw sizable gains early in the session, but gave most of that back by the end of the day. Bean oil prices were down modestly today.
Stewart-Peterson says even though the U.S. dollar is sharply higher today and the Brazilian real continues to collapse, U.S. soybean prices are beginning to become more and more competitive with Brazilian prices.
May wheat closed up 9 cents at $5.08 ¼, while July wheat closed up 8 ½ cents at $5.08 ½. Hightower says “wheat prices have been able to overcome sluggish global risk sentiment.” Kansas City wheat reached a one-week high, while Minneapolis wheat remained nearly unchanged.
ADM Ag Market View says wheat futures traded higher and were “supported by talk that China may be interested in a few cargoes of US HRW wheat.” Wheat futures, like most commodities, have been trending lower due to the spread of the coronavirus.