[Weds]: “Traders remain fearful that record weights and the slow slaughter pace will cause hogs to backup in the country” The Hightower Report said. However, they noted that pork values are strong, which could pull cash markets higher… [Tues]: National Daily Hog and Pork Summary / National carcass base was $1.34 higher… Iowa-Minnesota carcass base… no comparison to the prior day… USDA reported carcass cutout values this afternoon were down $9.76… Slaughter rates were rising, but still behind a year ago. “Slaughter for the week so far is up 6% from last week but is still down 18% from the same week last year,” Stewart-Peterson said. “The cash index is down again…

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Wed 5/20/2020 8:29 AM

 

Lean hogs - “Traders remain fearful that record weights and the slow slaughter pace will cause hogs to backup in the country” The Hightower Report said. However, they noted that pork values are strong, which could pull cash markets higher.

 

They also note the market has been down for eight of the past nine sessions, hitting the lowest points since late April. “Technical indicators are now oversold with the steady price erosion off of the May 4 peak,” they said.

 

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

 

In weighted average negotiated prices for barrows and gilts, USDA reported;

 

National carcass base was $1.34 higher to $38.36/cwt.

National live was up 19 cents to $30.41

Iowa-Minnesota carcass base was $39.89, with no comparison to the prior day

 

USDA reported carcass cutout values this afternoon were down $9.76 to $97.70/cwt.

 

Traders continued to have concerns about the reduced slaughter pace and how long it will take to rebound. “This leaves July hogs trading near 57.30 as compared with the CME lean index at 68.70,” the Hightower Report said. “Traders remain fearful that record weights and the slow slaughter pace will cause hogs to back-up in the country.”

 

Slaughter rates were rising, but still behind a year ago. “Slaughter for the week so far is up 6% from last week but is still down 18% from the same week last year,” Stewart-Peterson said. “The cash index is down again today despite increasing slaughter rates, which is a bit concerning. Pork values made their lowest close yesterday since May 4.”

 

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.”

 

Corn

 

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.

 

Soybeans

 

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

 

“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.”

 

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