[Mon]: Beef prices are at their lowest levels since August 13, supply appears to be increasing, and the short-term demand outlook is questionable, according to The Hightower Report… [Fri]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were lower… In negotiated cash sales in Nebraska, the USDA reported 9,233 head sold dressed at $169-170, with 13,940 live sales at $107-109. In Iowa/Minnesota, 4,126 head were sold live at $104-110, and 4,908 head were sold dressed at $168-170… Trade is “hopeful” that cash cattle can continue to rally in the weeks ahead, The Hightower Report said. “But production levels look somewhat burdensome and demand remains questionable”…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 10/12/2020 8:43 AM
Cattle - Beef prices are at their lowest levels since August 13, supply appears to be increasing, and the short-term demand outlook is questionable, according to The Hightower Report.
Meat demand mixed
Restaurants and caterers typically order aggressively this time of the year as to secure supplies for the busy holiday season. Retail demand for beef has been running strong, but due to Covid, corporate and family events at restaurants and hotels could be down considerably from recent years, which will keep buyers less active, according to The Hightower Report.
The Friday afternoon rally brought hog futures back from midday losses and left prices 7 to 77 cents higher at the close, said Alan Brugler of Brugler Marketing. For December contracts that extended the rally to $4.63 from Friday to Friday.
Grain volatility continues
The charts are bullish, the news is bullish, so there is no reason to think this will end until a record South American crop is assured, but extreme volatility will be a daily factor, said Jody Lawrence of Strategic Trading Advisors.
In Brazil, rain showers favored northern Mato Grosso, northern Goias, Bahia, Minas Gerais, eastern Sao Paulo, Parana, and Santa Catarina. Rains are expected to be more widespread this week. The 6 to 15-day forecast is calling for “Somewhat heavier rainfall” for the growing region, said Joe Barker of CHS Hedging.
Fri 10/9/2020 4:34 PM
Boxed beef cutout values this afternoon were lower on Choice and Select, USDA said.
Choice fell $1.94 to $214.06/cwt.
Select went down $3.28 to $199.82.
In negotiated cash sales in Nebraska, the USDA reported 9,233 head sold dressed at $169-170, with 13,940 live sales at $107-109. In Iowa/Minnesota, 4,126 head were sold live at $104-110, and 4,908 head were sold dressed at $168-170.
“The large supply levels are pressuring the futures somewhat,” Virginia McGathey of Mcgathey Commodities said. “As demand tends to be more limited this time of year, the market had a bit of a pullback.”
“That weakness limited rallies in cattle this week,” Stewart-Peterson said. “The feeder market added selling pressure as contracts struggled with the rally in grain and the technical weakness on the charts.”
Exports, discount supporting hog futures
Trade is “hopeful” that cash cattle can continue to rally in the weeks ahead, The Hightower Report said. “But production levels look somewhat burdensome and demand remains questionable.”
The “short-term overbought” condition of the market helped spark some selling, but the market managed some small gains today, The Hightower Report said. “The huge discount (to cash) is providing underlying support.”
WASDE report mostly neutral
Today marked the release of the monthly WASDE report, with Corn and wheat coming out neutral and soybeans “feeding the bull,” according to Mike Zuzolo of Global Commodity Analytics.
Demand and reductions to ending stocks in that WASDE report are the major factors for a rally today, Ami L. Heesch of CHS Hedging said.
Corn ending stocks were reduced in the WASDE report, to 336 mln bushels, and lowered harvested acres by 1 mln. That sparked a higher day in the market, as additional strength from the rally in the soybean market, Ami L. Heesch of CHS Hedging said. “Feels like the trade is working off a much lower stocks number than what the USDA released in today’s report.”
ADM Investor Services said some traders feel final exports in corn could move higher despite not changing in today’s report. “There was talk today that China was active this week in buying US April corn.”
After today’s report, “Soybeans are the ones to look at for leadership to the upside,” Mike Zuzolo of Global Commodity Analytics said. “I think this is the tightest supply-ending stocks number we’ll see from SDA until January given the stronger yields.”
“The soybeans continue their trek to higher levels on smaller stocks and ongoing demand for U.S. beans,” Ami L. Heesch of CHS Hedging said. “Farmers have sold into the rally while country elevators wait for trains to load beans out for the new crop program.”
It was a mixed market for wheat as Chicago traded weaker on increased world stock estimates, Ami L. Heesch of CHS Hedging said.
“Today’s USDA report was a mixed bag for the wheat crop,” Stewart-Peterson said. “Right in line with trade expectations, the USDA lowered U.S. ending stocks from 925 mb to 883 mb today. Outlook for this month is reduced supplies, higher domestic use, unchanged exports, and, of course, lower ending stocks. However, the market was not expecting world ending stocks to go from 319.4 mmt to 321.45 mmt – as the trade guess was around 317 mmt.”