[Thurs]: Beef prices have been dropping since hitting peaks on May 12, but they stay “well above” the previous all-time highs, The Hightower Report said. “This holds packer margins high and should continue to support the cash market”… [Weds]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were lower… Choice fell $5.43… Select went up $2.31… In negotiated cash sales in Nebraska, the USDA reported 7,546 head sold dressed at $175-190, with 1,707 sold live at $110-120. In Iowa/Minnesota, 1,291 head were sold live at $114-116, and 3,281 head were sold dressed at $175-190… “With slaughter running nearly 11% higher than last week, we should at least see cash values steady, if not higher,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 5/21/2020 8:33 AM
Cattle - The cattle market is technically overbought, The Hightower report said, but cash prices should help the June contract, which “remains at a huge discount,” they said. “Look for a continued advance in nearby futures contracts.”
Today marks the last trading day for the May feeders contract, with long liquidation coming on Wednesday expected to permeate into today’s trade, Total Farm Marketing said. Expect more position squaring ahead of tomorrow’s cattle-on-feed report.
Livestock looking for next push
Beef prices have been dropping since hitting peaks on May 12, but they stay “well above” the previous all-time highs, The Hightower Report said. “This holds packer margins high and should continue to support the cash market.”
Tightening supply, from lower production and hogs lost to euthanasia, makes The Hightower report expect higher trade over the near term. “We cannot rule out a bulge in production once all the slaughter plants are back up and running, but after the recent tightness in supply, the restocking needs should be significant.”
Wed 5/20/2020 4:35 PM
Boxed beef cutout values this afternoon were lower on Choice and higher on Select, USDA said.
Choice fell $5.43 to $404.04/cwt.
Select went up $2.31 to $391.18.
In negotiated cash sales in Nebraska, the USDA reported 7,546 head sold dressed at $175-190, with 1,707 sold live at $110-120. In Iowa/Minnesota, 1,291 head were sold live at $114-116, and 3,281 head were sold dressed at $175-190.
The cattle market “challenged” the high set on Monday early on today, but midsession selling saw the prices fall lower today, The Hightower Report said. “Technically, the market is a bit overbought, but with cash cattle trading near $155 to $118, June remains at a huge discount,” they said.
“With slaughter running nearly 11% higher than last week, we should at least see cash values steady, if not higher,” Stewart-Peterson said.
Lean hogs, cattle continue downtrends
Cash cattle trade has been “very quiet” this week, according to Stewart-Peterson Wednesday afternoon. They said the June live cattle contract is overbought and looks vulnerable to making a bearish key reversal.
The lean hog market “remains in a steady downtrend” The Hightower Report said. Selling in Wednesday’s market pushed the market to its lowest point since April 27, and a move over $57 would need to swing in to turn charts positive, they said.
Chinese interest boosts soybeans
Ideas abound for a big crop coming in the U.S. which is causing markets to not jump on the “continued Chinese buying interest,” Ami L. Heesch of CHS Hedging said.
Soybeans and wheat were the big winners of the day as global trade and poor weather across the ocean helped to support price action on Wednesday. The market is expecting lower volume overall the next few days as traders square up ahead of a three-day weekend.
Planting progress and “mostly favorable weather conditions” are hurting the corn market right now, forcing some lower closes today, Ami L. Heesch of CHS Hedging said. “There are concerns of corn not getting planted in parts of North Dakota and the crop getting too much rain in parts of Ohio and Illinois, as the plants are fairly young yet,” she said. “There has been some chatter about areas needing to get replanted.”
Rainfall hit the western Corn Belt in areas that had been dry this year, a source of early pressure to the corn market, The Hightower Report said. Ethanol production is also a source of support for the corn market, with Hightower noting a 7.46% increase in barrels per day this past week.
Soybeans traded higher “on word that China was a net buyer of new crop U.S. soybeans,” ADM Investor Services said. “Current Brazil and Argentina soybean prices are a discount to US. New China buying is for crushers. Some hope that China will soon begin to buy new crop US soybeans for their reserves.”
Soybeans reached a one-week high during today’s session, as a pullback in the US dollar gave support “across the board,” The Hightower report said. “It makes U.S. exports more attractive than Brazilian exports,” they said. “Optimism over potential Chinese purchases of U.S. soybeans provided another source of strength to the market.”
The wheat futures are being supported by higher new crop exports from Russia, ADM Investor Services said. The dry weather across the ocean and Russian flour prices are helping to support the market. “There is talk that Russia could consider extending limits on export quotas past June until more is known about their 2020 crop,” they said.
The wheat market is seeing additional crop losses around the globe, helping raise prices in the futures market, Ami L. Heesch of CHS Hedging said. Those losses come from dryness in Europe and Russia, as they call for more possible production cuts.