[Tues]: “With beef prices and cash markets in a downtrend, and futures at a large premium to the cash market, the upside looks limited and the market looks vulnerable to long liquidation selling if support is violated,” The Hightower Report said… [Mon]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were steady on Choice and higher on Select… In negotiated cash sales in Iowa/Minnesota, the USDA reported 76 head were sold dressed at $158, with no live sales. There were no reported sales in Nebraska. Cash trade firmed up to end last week, but prices “are still down from the previous week,” Stewart-Peterson said…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 9/15/2020 8:31 AM
Cattle - The technical action for beef is very bullish and the close above $111.42 for December cattle points to a test of the August highs. “However, the fundamentals do not look so rosy and both beef and cash markets remain sluggish,” The Hightower Report said this morning.
“With beef prices and cash markets in a downtrend, and futures at a large premium to the cash market, the upside looks limited and the market looks vulnerable to long liquidation selling if support is violated,” The Hightower Report said.
Beef trends down, but technical action bullish
The hog market spiked higher over the last two-weeks on a positive swine flu test in Germany and China immediately banning their imports, said Jody Lawrence of Strategic Trading Advisors. “If more cases show up in Europe, U.S. hog producers will have another opportunity for increased world export business which is a welcome surprise as China’s hog herd rebounds,” Lawrence said.
While, African swine fever has caused the ban on exports from Germany, it is not a supply issue as of yet. “As a result, Europe could have an oversupply of pork over the near term unless production issues do develop,” The Hightower Report said.
Traders continue to see beef demand as better than expected and some indications of a firmer cash market on Friday helped to support more aggressive buying, The Hightower Report said.
Mon 9/14/2020 4:18 PM
Boxed beef cutout values this afternoon were steady on Choice and higher on Select on light to moderate demand and light offerings, USDA said.
Choice fell $2.68 to $217.21/cwt.
Select went up 66 cents to $207.76.
In negotiated cash sales in Iowa/Minnesota, the USDA reported 76 head were sold dressed at $158, with no live sales. There were no reported sales in Nebraska.
Cash trade firmed up to end last week, but prices “are still down from the previous week,” Stewart-Peterson said. “September feeders have tested but not yet broken through the 20-day moving average resistance.”
“The market now above the 18-day moving average suggests the immediate-term trend has turned up,” The Hightower Report said. “There could be more upside follow-through since the market closed above the second-swing resistance.”
Cattle climbing higher
The December contract closed “sharply higher” to its highest level since August 26, The Hightower Report as demand is better than expected.
Lean hogs “failed to attract new buying interest,” The Hightower Report said. The market dealt with an outside day after Friday’s “massive volume”, and the market sits at a premium to the cash market.
Conditions hold steady
Traders are watching Sally as the storm has moved to a hurricane set to make landfall in the next couple of days, Ami L. Heesch of CHS Hedging said. Tech stocks helped firm up Wall Street as well, she said.
In today’s crop progress report corn condition was rated 60% good/excellent according to the USDA. Soybean condition is at 63% good/excellent nationwide while winter wheat is 10% planted, just above average pace.
Gains were limited in corn today as harvest is expected to get started shortly and conditions were “expected to be steady,” Ami L. Heesch of CHS Hedging said.
“The fact China continues to buy U.S. corn is supportive,” ADM Investor Services said. They also noted that the cold weather slowing possible harvest and maturation is helping factors as well.
“Soybean futures are overbought but momentum traders continue to add to their bullish bias,” ADM Investor Services said.
Strong demand and crop sizes being reduced continue to be the biggest boon for the soybean market that has hit two-year highs. There was a slight bit of profit taking on the November contract, Ami L. Heesch of CHS Hedging said.
Many traders believe wheat prices are “overvalued,” ADM Investor Services said. There has been a lack of farmer selling in Russia which has supported prices near season highs, they said.
Some bargain buying helped support wheat from dome early defensive positions, Ami L. Heesch of CHS Hedging said. “There are still hopes that China will be in the market for more U.S. wheat,” she said.