[Weds]: Traders seem overly optimistic that cash cattle can trend higher mid-term, according to The Hightower Report. Cattle slaughter over the past two weeks has come in below year-ago levels, after the show list this week is smaller and these factors have traders hoping that cash can trade up… [Tues]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were higher on Choice and lower on Select… Choice was up 41 cents… Select was down $1.81… In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa/Minnesota, there were no live sales, and 1,077 head sold dressed for $161-170. “Keep in mind that the supply of cattle which have been on-feed for 120 days or longer on July 1 was at 4.858 mln head, up 16.3% last year and up 24.2% from the five year average,” the Hightower Report said. “Weights remain well above last year and well above the five-year average”…

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Wed 7/29/2020 8:22 AM

 

Cattle - Cattle Showlists, the number of finished cattle ready for packers to buy this week, was estimated at 7,200 over the previous week, Allendale said.

 

Cattle futures closed off the highs, but still recovered some of Monday’s losses with gains of $0.22 to $1.17. Feeder cattle also pulled back from midday highs, but still closed with triple digit gains in the front months, Brugler Marketing said.

 

Hog backlog mirrors processing woes

 

If weekly hog processing rates stay at 2.6 million head each week ahead the market hog backlog will fall from 2.4 million right now to 2.0 million in four weeks, Allendale said. After that, with the seasonal supply increase, it will balloon to 3.6 if the processing situation does not pick up.

 

Traders seem overly optimistic that cash cattle can trend higher mid-term, according to The Hightower Report. Cattle slaughter over the past two weeks has come in below year-ago levels, after the show list this week is smaller and these factors have traders hoping that cash can trade up.

 

August cattle is caught in a range dealing with the headwinds of hefty premium to cash and burdensome supplies coming soon against potential red-meat demand as the economy struggles to resume its re-opening, said William D. Moore of the Chicago Board of Trade. “What cattle sorely needs is at least a taming of Covid-19 and solid resumption of meat demand thru a reopening of U.S. restaurants,” he said.

 

Tue 7/28/2020 4:38 PM

 

Boxed beef cutout values this afternoon were higher on Choice and lower on Select, the USDA said.

 

Choice was up 41 cents to $202.96/cwt.

Select was down $1.81 to $188.32.

 

In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said. In Iowa/Minnesota, there were no live sales, and 1,077 head sold dressed for $161-170.

 

“Keep in mind that the supply of cattle which have been on-feed for 120 days or longer on July 1 was at 4.858 mln head, up 16.3% last year and up 24.2% from the five year average,” the Hightower Report said. “Weights remain well above last year and well above the five-year average.”

 

Those heavier weights were working to offset declining kill counts. Weekly kill counts are beginning to pull back from last year, but production is still running hot due to heavy cattle weights,” Stewart-Peterson said. “October live cattle traded back above the 20-day moving average level today after making their first closes below that level yesterday since June 24.”

 

Cattle recover from early losses

 

Cattle were higher after an early dip. “The (cattle) market closed sharply higher on the day,” the Hightower Report said. “Slaughter has been coming in below last year over the past several weeks, but with large supply of cattle which have been on feedlots for 120 days or more, traders expect production levels to remain high and for slaughter to begin to push well above last year.”

 

“The (hog) market closed near unchanged,” the Hightower Report said. “While slaughter and pork production levels remain burdensome, a firm tone to the cash markets and higher pork cut-out values have provided underlying support. US pork is considered cheap, the US dollar has fallen significantly in recent weeks and Mexico has even been a more active buyer of US pork.”

 

Strength leaves grain markets

 

Improved weather and yield expectations pushed corn prices lower. “A benign weather outlook and a surprising uptick in crop ratings saw the good to excellent category pick up 3%, now at 72%,” Stewart-Peterson said. “Without a pollination scare and what appears to be limited dry conditions, expectations are now suggesting that yield may be on the rise, perhaps near 180.”

 

“An then they were gone!” Ami Heesch, with CHS Hedging, said. “The strength in grain prices, that is. The row crop and wheat markets were on the defensive form improving crop conditions and ample supplies. Egypt snubbed the US again this week with today’s tender. There were no reports of corn and/or beans sales to China or Unknown today.”

 

Corn

 

The improving crop conditions and weather outlook combined to push corn markets lower on Tuesday. “The corn market took to the negative side of life on reports of improving crop conditions and mostly favorable weather outlooks for this week,” Ami Heesch, with CHS Hedging, said.

 

“Corn futures traded lower,” Steve Freed, with ADM Investor Services, said. “A bigger than expected increase in US weekly corn ratings offered resistance. Ongoing concern about lower US ethanol use and slow World demand for US corn exports has limited gains in futures. CU settled near session lows and near contract lows.”

 

Soybeans

 

“Given that the weather forecast is relatively dry but also cool, the market is betting that there will be little problems with soybean production, at least through the first week of August,” Stewart-Peterson said. “Quickly the market will get through its weather concerns over the next three weeks unless there is adversity.”

 

Soybeans moved lower, although the demand for U.S. soybeans remains strong. “Soybeans hit the skids today on improving crop conditions,” Ami Heesch, with CHS Hedging, said. “The soyoil market was on the defensive from spillover weakness in Malaysian Palm oil overnight. Underlying support in the bean market stems from strong demand for US soybeans.”

 

Wheat

 

The general weakness in row crops and tough export competition pushed wheat markets lower Tuesday. “The wheat market was on the defensive for day 2 from spillover weakness in the row crops and stiff competition in the world wheat export arena,” Ami Heesch, with CHS Hedging, said. “Mpls sneaking off to either reach or make new contract lows.”

 

“Wheat futures traded lower,” Steve Freed, with ADM Investor Services, said. “Lower corn and soybean price action offered resistance. Over the last 2 trading days, Matif futures also traded lower. Drop is US Dollar should offer support but so far is not helping demand for US export wheat.”

 

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