[Mon]: USDA showed slaughter for cattle was up more than 10% last week, but the mark is still down 24.6% from last year… Markets this week will be looking at the Friday release of the Cattle on Feed report… [Fri]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were sharply down… Choice fell $16.60… Select went down $18.34… In negotiated cash sales in Nebraska, the USDA reported 1,560 head sold dressed at $170-190, with 2,268 sold live at $110-120. In Iowa/Minnesota, 222 head were sold live at $113, and 1,495 head were sold dressed at $178-190… “Slaughter levels have continued to improve this week which has helped bolster demand in the country for slaughter supplies,” Stewart-Peterson said. “Beef prices may have priced themselves out of strong consumer demand after rallying more than 100% in about a month. Beef prices have begun to pull back, though this should not affect beef production as margins are still extremely strong”…  

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Mon 5/18/2020 8:32 AM

 

Cattle - The USDA showed slaughter for cattle was up more than 10% last week, but the mark is still down 24.6% from last year. “The huge discount of June to the cash market combined with record-type profit margins should hold the cash market firm,” The Hightower Report said.

 

The support should continue into this week, they added, noting that traders were net buyers of nearly 7,000 contracts, increasing long positions.

 

Lean hogs in short-term downtrend

 

The lean hog market is in a “very short-term downtrend channel” after peaking in early May, The Hightower Report said. China appears to be “actively attempting” to boost pork supplies as well as grains and oilseeds, which figures to give some support. “Traders see the increasing slaughter pace as a negative force, but with the very high profit margins from packers, the cash market may stay firm.”

 

Markets this week will be looking at the Friday release of the Cattle on Feed report, Michaela White of CHS Hedging said.

 

Fri 5/15/2020 4:21 PM

 

Boxed beef cutout values this afternoon were sharply down on Choice and Select, USDA said.

 

Choice fell $16.60 to $434.32/cwt.

Select went down $18.34 to $419.06.

 

In negotiated cash sales in Nebraska, the USDA reported 1,560 head sold dressed at $170-190, with 2,268 sold live at $110-120. In Iowa/Minnesota, 222 head were sold live at $113, and 1,495 head were sold dressed at $178-190.

 

Boxed beef values have nearly $200 in downside as they continue to fall, David Mershon of The Andersons said. “Slaughter is picking up a little bit, up about 85,000 head this week,” he said. “We really need to be up about 200,000 head, it’s very important.”

 

“Slaughter levels have continued to improve this week which has helped bolster demand in the country for slaughter supplies,” Stewart-Peterson said. “Beef prices may have priced themselves out of strong consumer demand after rallying more than 100% in about a month. Beef prices have begun to pull back, though this should not affect beef production as margins are still extremely strong.”

 

Cattle close higher as slaughter increases

 

Cattle finished higher to close out the week in the June live contract as there is a huge discount to the cash market, The Hightower Report said. “Record type profit margins should hold the cash market firm.”

 

Slaughter estimates for the week showed cattle at 499,000 head, up 47,000 head from last week, but well below last year’s pace of 662,000 head. Lean hog slaughter is at 2.103 mln head, a 328,000 head increase from last week.

 

Quiet end to the week

 

The week continues to be quiet to close things out, Ami L. Heesch of CHS Hedging said. “Farmers are focused on field work ahead of possible rain events over the weekend and next weekend,” she said.

 

There continue to be discussions between the U.S. and China, “despite potentially cutting ties with them,” Heesch said.

 

David Mershon of The Andersons noted how Larry Kudlow, the White House advisor, tried to ease fears of COVID-19 impacts on U.S./China trade relations.

 

Corn

 

The corn market is mixed to end the week as there is deferred month pressure, Ami L. Heesch of CHS Hedging said. Ideas of big crop prospects for the year are creating that pressure. “The nearby was supported from decent weekly export sales last week, another positive in ethanol production and strength in the crude oil market,” she said.

 

There are ideas the nearly a third of Brazil’s second-crop corn lacking moisture for filling which is making production estimates get a bit smaller, David Mershon of The Andersons said. “Those estimates are still more than adequate for U.S. and world production today,” he said.

 

Soybeans

 

Today’s trade saw a few attempts at recovery moves, but none were able to fully sustain themselves, with the soybean market only seeing small gains, The Hightower Report said. “Recent purchases have raised hopes that China can fulfill their Phase One trade deal commitments which provided the soy complex with underlying support.”

 

Alex Breitinger of Paragon Investments said he is looking at the quick planting progress in both soybean and corn as something that will play a major factor moving forward. “Timely planting reduces the risk that plants mature in too-hot late summer weather,” he said. “As a result, crop watchers are revising this years expected harvest upwards on expectations for better crop yields.”

 

Wheat

 

“The U.S. continues to be uncompetitive in the world export arena,” Ami L. Heesch of CHS Hedging said. “Overall spring wheat acres could be less than originally expected because of the ongoing cool/wet conditions in the North Dakota valley area.”

 

As world production continues to grow and eyes turn to Russian and European weather, “wheat continues to be under pressure, David Mershon of The Andersons said.

 

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