[Thurs]: 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”… [Weds]: National Daily Hog and Pork Summary / National carcass base down 41 cents… Iowa-Minnesota carcass base down 30 cents… USDA reported carcass cutout values this afternoon rose $2.22… Pork values continue to trend lower despite China spot pig prices up nearly 2% for the week, Stewart-Peterson said this afternoon. “This could be hinting at even stronger China pork buying in the weeks ahead,” they said…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 5/21/2020 8:33 AM
Lean hogs - The July hog contract needs a close over $56.97 today to start turning charts more positive, The Hightower Report said. “With strong demand, and the potential for lost production, pork values are strong enough to pull the cash market higher,” they said.
After “tame trade and limited daily price movement” yesterday, Total Farm Marketing said calls are choppy to lower today. “Cash weakness limited the potential rally and kept the trend since May 4th clearly lower.”
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
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 41 cents to $37.91/cwt.
National live was up 59 cents to $31.52
Iowa-Minnesota carcass base down 30 cents to $39.69
USDA reported carcass cutout values this afternoon rose $2.22 to $99.92/cwt.
Pork values continue to trend lower despite China spot pig prices up nearly 2% for the week, Stewart-Peterson said this afternoon. “This could be hinting at even stronger China pork buying in the weeks ahead,” they said.
“Technical momentum is still pushing the hog futures lower into oversold territory,” Stewart-Peterson said. “This could make hog futures extra susceptible to a recovery bounce, it is unclear what could provide fuel for a bounce if recovering slaughter can’t. June hogs are still at a sharp discount to the cash index.”
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.