[Weds]: Continued weakness for the beef market short term would be a signal for the cash markets, according to The Hightower Report. Yesterday’s boxed beef cutout was the lowest since March 12… [Tues]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were lower… Choice was down $1.39… Select was 81 cents lower… In negotiated cash sales in Nebraska, the USDA reported 684 head sold live for $95, and 2,693 head sold dressed for $148-155. In Iowa-Minnesota, there were 1,089 head sold live for $95-98, and 3,282 head sold dressed for $151-155. “Some traders believe that cash cattle are trading cheap enough to attract better demand, and the collapse and beef prices over the past month may be enough to provide some underlying support,” the Hightower Report said…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 7/1/2020 8:25 AM
Cattle - Live cattle futures were down 12 to 32 cents on Tuesday. Feeder cattle futures were hurt by higher feed costs, with the front months closing as much as $1.10 in the red, Brugler Marketing said.
Continued weakness for the beef market short term would be a signal for the cash markets, according to The Hightower Report. Yesterday’s boxed beef cutout was the lowest since March 12.
Restaurant openings boost demand
Traders are hoping that the reopening of restaurants around the country will help boost consumer demand and offset the typical seasonal decline in beef demand into the heart of the summer, The Hightower Report said. The process has been much slower than expected, and this has kept the beef market in a steady down trend.
Tue 6/30/2020 4:47 PM
Boxed beef cutout values this afternoon were lower on Choice and lower on Select, the USDA said.
Choice was down $1.39 to $206.97/cwt.
Select was 81 cents lower to $199.90.
In negotiated cash sales in Nebraska, the USDA reported 684 head sold live for $95, and 2,693 head sold dressed for $148-155. In Iowa-Minnesota, there were 1,089 head sold live for $95-98, and 3,282 head sold dressed for $151-155.
“Some traders believe that cash cattle are trading cheap enough to attract better demand, and the collapse and beef prices over the past month may be enough to provide some underlying support,” the Hightower Report said. “August cattle needs a close above 98.75 to turn the charts bullish.”
“Daily kills have overtaken daily kills from the same time last year, and this should add to beef supplies and keep pressure on the product prices,” Stewart-Peterson said. “Hot temperatures for the next two weeks may keep weights a bit lighter. August live cattle traded at their highest prices today since June 2 and were well above their 100-day moving average resistance level.”
Cattle lower, hogs jump higher
Analysts are watching to see if cheap cash cattle trade and declining beef prices will be enough to sustain cattle markets moving to higher levels and staying there. “August cattle closed well off of the highs and lower on the day after the early rally to the highest level since June 10 failed to find new buying support,” the Hightower Report said.
“October hogs closed sharply higher on the day and experienced follow through to the upside from the key reversal yesterday,” the Hightower Report said. “August hogs closed higher but have not even filled the overhead gap. The technical action is improving slightly as the market probes for some type of a short-term low.”
Grains surge after report
Tuesday’s USDA acreage report showed a substantial drop in corn acres from what was expected. “The big news today was a drop in projected (corn) acres,” Stewart-Peterson said. “The market was expecting 95.2 million planted acres. Today’s figure of 92 million, 3.2 million acres less than the pre-report estimate, was a surprise to the market.”
“The grain markets started out higher on short covering and Chinese buying optimism while waiting for the release of the USDA data,” Ami Heesch, with CHS Hedging, said. “Prices traded much higher midday on less than expected acreage numbers around the horn. June 1 stocks figures were mostly overshadowed by the smaller acreage numbers.”
“USDA indicated there was 2.2 mln corn acres not yet planted,” Steve Freed, with ADM Investor Services, said. “Most feel it may be too late for these acres to get planted. Key now is yield. USDA is using a yield of 178.5 versus 167.4 last year. Some feel fact 83% of US corn crop has a rating that suggest a trend yield or higher suggest current crop yield could be closer to 180.0.”
“The corn market opened higher on leftover fuel from yesterday despite a second week of improving crop conditions,” Ami Heesch, with CHS Hedging, said. “Hopes of possible Chinese buying provided underlying support. Corn got a boost midday, from a smaller than expected planted acreage number.”
"The report numbers were neutral for stocks at 1.386 bln bushels, only 5 mln more than the average pre-report estimate,” Stewart-Peterson said. “The acreage number at 83.8 mln was near 1 mln less than the pre-report estimates and just slightly above the March estimate of 83.51 mln. A warmer and drier forecast was viewed as supportive as well.”
“The soybean market opened higher on technical buying,” Ami Heesch, with CHS Hedging, said. “There was chatter in the market that China may be looking for another round of US soybeans although there was no confirmation to that affect. Prices rallied on USDA’s acreage forecast below what the trade was expecting and the rally in the corn market.”
“The wheat market traded higher in sympathy with the row crops,” Ami Heesch, with CHS Hedging, said. “Prices drew support from a lower wheat acreage number. Prices drew additional support from the cash market with all 487 deliveries that were put out against the July contract were stopped by a commercial. Mpls drew strength from a lower than expected acreage number.”
“Wheat futures ended higher,” Steve Freed, with ADM Investor Services, said. “Sharp rallies in soybeans and corn may have helped wheat futures. USDA June 1 US wheat stocks were a little higher than expected and acres were in line with trade guesses. USDA estimated that 41% of the winter wheat crop is harvested. US HRW farmer has been a steady seller of wheat.”