[Mon]: Pork processors are covering the natural flow of finished hogs (+4%) plus eating into some of the backlog. Two weeks ago, they drew it down by 44,000 and last week by 170,000 head. Allendale estimates there is under 1.9 million head backlog remaining… [Fri]: National Daily Hog and Pork Summary / National carcass base down 18 cents… Iowa-Minnesota carcass base down 16 cents… USDA reported carcass cutout values this afternoon fell 90 cents… “Hog weights are high, there are some packing shutdowns and a backlog of supplies,” Virginia McGathey of McGathey Commodities said. She said the market just can’t find an uptick in demand which is the support the futures market needs…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 6/29/2020 8:30 AM
Lean hogs - Pork processors are covering the natural flow of finished hogs (+4%) plus eating into some of the backlog. Two weeks ago, they drew it down by 44,000 and last week by 170,000 head. Allendale estimates there is under 1.9 million head backlog remaining.
The hog market is probing for a short-term low, The Hightower Report said. August hogs opened sharply lower and gapped down on Friday with the market down into new contract lows.
Supply glut flattens livestock purchases
The monthly hog and pig report reported large supplies of pork for weeks to come. Market-ready pigs over 180 pounds were the most watched number and were up 13% from the prior year. The next weight category was up 12% assuring a steady and abundant supply of pigs in future weeks, according to The Cattle Report.
August cattle has remained in a choppy to lower consolidation pattern since early May. Beef prices remain in a short-term downward trend and until prices can find a floor, the market is vulnerable to speculative selling, according to The Hightower Report.
Fri 6/26/2020 4:27 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 18 cents to $28.48/cwt.
National live was up 87 cents, staying at $25.21
Iowa-Minnesota carcass base down 16 cents to $28.96
USDA reported carcass cutout values this afternoon fell 90 cents at $65.95/cwt.
“Hog weights are high, there are some packing shutdowns and a backlog of supplies,” Virginia McGathey of McGathey Commodities said. She said the market just can’t find an uptick in demand which is the support the futures market needs.
“The lone bright spot in the report, was the June-November farrowing intentions being down a forecasted 5% from last year,” Stewart-Peterson said. “With the weakened hog price, and strong sow slaughter could have some impact into the future. Difficult close today with the July, August and October contract breaking to new lows.”
Hogs tumble to close week
The August hogs contract was down more than $3.00 today, with the USDA hogs and pigs report being seen as bearish “across the board,” The Hightower Report said.
Cattle markets were choppy and two-sided today, as it traded in sympathy with hog weakness, The Hightower Report said. “The market has stayd inside of Tuesday’s range ever since,” they said.
Slowdown worries hurt prices
Worries of another economic slowdown from the coronavirus are looming over the markets, leading to a negative day, Ami L. Heesch of CHS Hedging said.
Markets are now looking at virus concerns and next Tuesday’s acreage report moving forward, Heesch said.
Corn futures were slightly lower today as the week closed as normal rains across the Midwest should improve U.S. corn crop ratings, ADM Investor Services said. “There is also new talk That Chinese officials warn that increase US involvement in China affairs could jeopardize US and China trade deal,” they said.
“The combination of technical selling, a favorable forecast, and funds adding to short positions all weighed on futures this week,” Stewart-Peterson said. “In addition, there is much speculation as to what the quarterly stocks and acreage reports might say next week.”
“China continues to buy from Brazil,” Virginia McGathey of McGathey Commodities said. Sales from Brazil to China are up 41% from last year, while U.S. sales need to jump up to meet expected forecasts from the USDA based on the Phase 1 trade deal, she said.
“Managed funds actually increased net soybean and soymeal short positions,” ADM Investor Services said. They noted that much of today’s resistance came from a favorable 2-week forecast while worries about more coronavirus cases added to the overlying mood.
Wheat took a hit today as there is concern over wheat demand due to the increase in virus cases recently. Export demand is also a concern as EU and Black sea futures have dropped despite news of smaller crops in those regions, ADM Investor Services said.
There is a lot of uncertainty about demand growth, Virginia McGathey of McGathey Commodities said of the wheat market. “There is a number of things in the air that could underpin the futures right now, but generally it was selling all day long.”