[Weds]: 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…  [Tues]: National Daily Hog and Pork Summary / National carcass base was down 2 cents… Iowa-Minnesota carcass base was $1.05 lower… USDA reported carcass cutout values this afternoon fell $1.89… Traders were looking for fresh export news to help absorb increased production… “Huge pork production may be starting to take a toll on pork prices and overwhelming domestic demand,” Stewart-Peterson said… “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”…

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Wed 7/29/2020 8:22 AM

 

Lean Hogs - At the closing bell on Tuesday, August and October were down 35 and 2 cents respectively, while the back months were up by as much as 60 cents, Brugler Marketing reported.

 

The hog market has consolidated over the past 14 trading sessions as better-than-expected demand for pork has clashed with a burdensome short-term supply, according to the Hightower Report. If the demand tone eases at all, the market will be vulnerable to increased selling pressures.

 

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

 

In weighted average negotiated prices for barrows and gilts, USDA reported;

 

National carcass base was down 2 cents to $42.61/cwt.

National live was $1.62 higher to $32.44

Iowa-Minnesota carcass base was $1.05 lower to $42.81

 

USDA reported carcass cutout values this afternoon fell $1.89 to $69.41/cwt.

 

Traders were looking for fresh export news to help absorb increased production. “With US pork production running 8-12% above a year ago, the market will need active export news to avoid weakness in pork cut-out values ahead,” the Hightower Report said. “Pork cut-out values at midsession came in at $79.18, up $7.88.”

 

“Huge pork production may be starting to take a toll on pork prices and overwhelming domestic demand,” Stewart-Peterson said. “The pullback in the U.S. dollar should help to boost exports, but the dollar did appear to stabilize today. Hog contracts continued their choppy and sideways trend today, unable to break through nearby resistance or fall through nearby support.”

 

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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