[Weds]: In a bit of cattle trade news, Allendale noted President Trump said yesterday the U.S. should consider terminating any trade deals in which the U.S. imports cattle. “We have a lot of cattle in this country,” he said… “With packers still down last month, Allendale estimates marketings at 15.3% under last year… [Tues]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were sharply lower… Choice was down $5.48… Select fell $6.00… In negotiated cash sales in Nebraska, the USDA reported 702 head sold live for $115-120, and 1,507 head sold dressed for $180-190. In Iowa-Minnesota, there were 37 head sold live for $115, and 976 head sold dressed for $178-190. “Improving daily kills are helping to get cattle more current, with average weights dropping last week to 814lbs vs 816 the previous week,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 5/20/2020 8:29 AM
Cattle - In a bit of cattle trade news, Allendale noted President Trump said yesterday the U.S. should consider terminating any trade deals in which the U.S. imports cattle. “We have a lot of cattle in this country,” he said.
Following Thursday’s report, the Cattle on Feed report comes out Friday, with Allendale estimating a 13.3% decrease of feedlot placements. “With packers still down last month, Allendale estimates marketings at 15.3% under last year and May 1 Cattle on Feed at 4.9% under last year.”
Cold storage estimates coming out
Thursday will see the release of the Cold Storage report and Allendale estimates April pork stocks to sit at 604.588 mln pounds, or 17 mln less than last month. Typically, pork sees a 12 mln pound increase in this report. Beef stocks are expected to be at a 33 mln pound decrease, or 469.277 mln pounds.
Also in the Coronavirus Food Assistance Program, livestock producers will get paid for “already sold livestock between January 15 through April 15, Allendale said, and a payment for their inventory levels between April 16 and May 14. “The payment rate is $35 for hogs weighing over 120 lbs. or $45 for hogs weighing under 120 lbs,” Allendale said. “The payment rates for cattle are $125 for mature cattle, $135 for calves, $172 for feeders (+600 lbs.) and $247 for fed cattle.”
Tue 5/19/2020 4:35 PM
Boxed beef cutout values this afternoon were sharply lower on Choice and Select, the USDA said.
Choice was down $5.48 to $409.47/cwt.
Select fell $6.00 to $388.87.
In negotiated cash sales in Nebraska, the USDA reported 702 head sold live for $115-120, and 1,507 head sold dressed for $180-190. In Iowa-Minnesota, there were 37 head sold live for $115, and 976 head sold dressed for $178-190.
“Improving daily kills are helping to get cattle more current, with average weights dropping last week to 814lbs vs 816 the previous week,” Stewart-Peterson said. “Choice boxed beef closed at the lowest level yesterday since May 4 as beef inventories begin to increase, and consumer demand pulls back due to high prices or buying restrictions.”
“Beef prices have come down sharply in the last week but remain sharply above previous all-time record highs,” the Hightower Report said. “Slaughter is picking up in the last few weeks and record profit margins from the packer should help support an even better slaughter pace ahead.”
Hog traders worried about weights
“June cattle closed slightly higher on the session with the quiet inside trading day,” the Hightower Report said. “It is a small range and June cattle is still trading discount to the August contract. The market is overbought technically but June remains at a stiff discount to the cash market.”
Hogs were lower as traders worried about record weights and the slow slaughter pace, which could cause a backup. “July hogs closed sharply lower on the day and near the lows,” the Hightower Report said. "The selling pushed the market down to the lowest level since April 27. Technical indicators are now oversold with the steady price erosion off of the May 4 peak.”
Quiet trade as corn hopes for China purchases
“Overall quiet trade in the grain markets with corn dancing around amidst big crop ideas and rumblings that China may be in the market for US corn,” Ami Heesch, with CHS Hedging, said. “The soybean market stepped back on consolidation in the soyoil market after yesterday’s nice rally and no sign of China buying US beans.”
“Soybean futures could be near the midpoint of a broad range between 8.00 and 9.00,” Steve Freed, with ADM Investor Services, said. “Lack of large China buying US soybeans could increase US 2019/20 soybean carryout. Talk of higher US final planted soybean acres could also limit gains. Still large China buying could help soybeans test the higher end of the range.”
Analysts are watching the progress of planting this year’s corn crop. “Yesterday’s Crop Progress report showed corn plantings at 80% complete vs 44% for the same week last year and 74% on average,” Stewart-Peterson said. “This was a bit below market estimates and was slightly supportive.”
Corn markets were weighing mostly favorable weather conditions. “Corn prices were slightly higher throughout the day with gains limited from mostly favorable weather conditions with this week’s warmer temperatures across the US Midwest and talk of a pushback on rain events until the weekend,” Ami Heesch, with CHS Hedging, said.
Soybean planting progress was ahead of the normal pace, but below estimates, which helped support markets. “Planting progress was seen at 53% complete vs 16% complete for the same week last year and 37% on average,” Stewart-Peterson said. “This was still below market estimates and provided some support overnight.”
“Soybean prices were on the defensive from weakness in the soyoil market, favorable weather conditions and planting progress well above the 5-year average,” Ami Heesch, with CHS hedging, said. “Hearing that the next rain event for the WCB gets pushed back until the weekend. Gains stalled as the market awaits the next round of Chinese business.”
“Wheat futures traded mixed,” Steve Freed, with ADM Investor Services, said. “Liquidation of KC wheat vs corn spreads weighed on KC futures. Lower US Dollar and talk dryness could drop Europe and Russia 2020 crops offered support to Chicago. There was also talk that record high Russia domestic flour prices could force Russia to extend their export quota.”
“Wheat prices were mixed from farmers struggling to get the spring wheat planted to beneficial rain events across the US Southern Plains,” Ami Heesch, with CHS Hedging, said. “Support in Chicago comes from views of being oversold. KC was said to have seen pressure as the Texas winter wheat harvest begins.”