[Weds]: The jump in pork cutout values should help support better packer profit margins and may help support a further advance in cash prices, The Hightower Report said… [Tues]: National Daily Hog and Pork Summary / National carcass base was 19 cents lower… Iowa-Minnesota carcass base was up 53 cents… USDA reported carcass cutout values this afternoon rose $1.59… Traders are watching trends in the cash markets and pork values. “With the cash market at 78.14, sellers for December hogs are unlikely to be very active on moves under 65.00,” the Hightower Report said. “Pork cutout values at midsession came in at $101.03, up $6.72 on the day”…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 10/14/2020 8:21 AM
Lean Hogs - The jump in pork cutout values should help support better packer profit margins and may help support a further advance in cash prices, The Hightower Report said.
China’s pork imports from January to September totaled 3.29 million metric tons. This sounds great at 132% over last year, according to Allendale, who called it neutral as it implies a 380,000 import in September. That is right within the prior four months of 350,000- to 430,000-ton imports.
Chinese eating more beef
China is now the largest importer of beef in the world. An increasing middle class is becoming accustom to beef and beef consumption per capita is increasing, said the Cattle Report. Many of the high end food service businesses prefer the grain fed beef from the United States.
Hog slaughter in Minnesota could be reduced if a federal judge deems USDA’s 2019 Modernization of Swine Slaughter is revoked, Allendale reported. This measure removed maximum line speeds for some processors. Unions suggest this move increases risk of worker injury.
Tue 10/13/2020 4:58 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was 19 cents lower to $63.79/cwt.
National live was down $4.89 to $48.21
Iowa-Minnesota carcass base was up 53 cents to $65.02
USDA reported carcass cutout values this afternoon rose $1.59 to $95.90/cwt.
“We’ve had a great recovery rally,” Scott Shellady, with Ag Optimus, said. “I don’t think a pullback is something to be really worried about that. All rallies take a breather and step back… Pullbacks can be healthy. Pressure from the cattle market sparked a breather in the hogs yesterday."
Traders are watching trends in the cash markets and pork values. “With the cash market at 78.14, sellers for December hogs are unlikely to be very active on moves under 65.00,” the Hightower Report said. “Pork cutout values at midsession came in at $101.03, up $6.72 on the day.”
Livestock drop early, claw back
“Dec. cattle traded sharply lower on the day before closing higher,” the Hightower Report said. “The early selling pushed the market down to the lowest level since Sept. 22. While the cash market tone was firm yesterday, traders are nervous that supply issues could turn burdensome with the highest weights in five years and slaughter levels likely to increase over the near term.”
“December hogs closed slightly lower on the day after trading sharply lower on the session early,” the Hightower Report said. “The selling pushed the market down to almost fill all of the gap from October 8. Talk of the overbought condition of the market and ideas that China import demand could slowly decline into 2021 helped to pressure.”
Grain market recover from Monday's losses
“The ag markets saw a bounce off yesterday’s losses with the emergence of bargain hunters,” Ami Heesch, with CHS Hedging, said. “Wall Street saw pressure from the halt of the CoronaVirus vaccine trials and another stalled attempt at the Stimulus aid package. The $1.8 trln. was said to fall short of what is needed to make a difference in the lives of many Americans.”
Traders continued to monitor harvest progress. “US soybean harvest is estimated near 59% versus 38 last week,” Steve Freed, with ADM Investor Services, said. “Crop should still be rated 64% good/exc. versus 64 last week. Weekly US soybean exports were near 79 mln bu. versus 74 last week and 35 last year. Season to date exports are near 334.2 mln bu. versus 189.7 last year.”
Export sales helped push corn prices higher Tuesday. “Corn prices were higher as new export sales trumped rapid harvest activity and a stronger US dollar,” Ami Heesch, with CHS Hedging, said. “We sold corn to Mexico for the 20/21 marketing year. The March contract poked just above $4 and settled just below $4.”
“Strong US domestic cash basis and lack of US farmer selling helped support,” Steve Freed, with ADM Investor Services, said. “ There also continues to be rumors that China is looking to buy US corn. China domestic corn prices are record high. Post Covid China economy appears to be growing. This could increase their demand for imported feed grains.”
The possibility of more soybean sales to China may have helped soybeans move higher Tuesday. “Soybeans traded higher,” Steve Freed, with ADM Investor Services, said. “USDA did not announce new US soybean sales especially to China. Still there were rumors that China was in today buying a few US soybean cargoes.”
“The soybean market traded higher on ongoing demand and dryness in South America as they begin their planting season for beans,” Ami Heesch, with CHS Hedging, said. “Argentina oilseed workers look to go on strike, citing wages as a primary issue. Country movement slowed after yesterday’s fallout.”
“Wheat futures closed mixed,” Steve Freed, with ADM Investor Services, said. “WZ was near 5.94 with a range 5.90-6.04. Nearby Chicago wheat continues to dance around 6.00. This historically has been an important price. Need either increase demand or lower supply to push higher. Lack of bullish news could send futures lower.”
“The wheat market traded higher at the open on dryness in the US and the Black Sea Region,” Ami Heesch, with CHS Hedging, said. “Prices in Chicago retreated from its highs on strength in the US$. Algeria begins purchasing optional origin wheat for their recent tender (most likely from EU and the Baltics).”