[Thurs]: The Hightower Report said China's pig herd in October is up 26.9% from year ago. “Traders see decent support from China short-term, but import demand is likely to decline into 2021 as production in China is sharply higher,” the report said… [Weds]: National Daily Hog and Pork Summary / National carcass base down 20 cents… Iowa-Minnesota carcass base down 10 cents… USDA reported carcass cutout values this afternoon fell 92 cents… “The COVID expansion has people worried,” Virginia McGathey, with McGathey Commodities, said. “Also, the silence from China, really not doing anything with grains or with livestock from this standpoint, and it’s really making some of these markets a little more vulnerable. Certainly the hog market is vulnerable to some liquidation. But that being said, we closed on our high"…
Farm Commodity Newsletter/Iowa Farmer Today
Thu 11/19/2020 8:55 AM
Lean hogs - The Hightower Report said China's pig herd in October is up 26.9% from year ago.
“Traders see decent support from China short-term, but import demand is likely to decline into 2021 as production in China is sharply higher,” the report said.
“Lean hog futures finished the midweek session mostly in the red,” said Brugler Marketing. December and February futures closed yesterday 27 cents higher, but the deferreds were at least 37 cents weaker.
Virus surge influences demand
“It feels like the market is finding support from a tendency for consumers to want to own a bit more inventory than normal due to virus surge. In the end, demand may not be as strong as believed,” The Hightower Report said this morning.
As for pork today, “the market is experiencing a short-term recovery bounce, but the cash market news continues with a negative tilt,” The Hightower Report said.
Likewise, Brugler Marketing said markets look for a bullish note on the near term, but are more pessimistic about next summer.
Rains in South America dampen prices here
Grains are down this morning as better-than-expected rains in central and northern Brazil are weighing on soybean and corn values, said Steve Feed of ADM Investor Services.
John Payne of Daniels Trading said the outlook for the season remains dry in the U.S.
The USDA export news is bullish for corn and soybeans today, but wheat is a little lower than expectations, Mike Lung of Allendale said this morning. It still looks like good support is working its way into the export market, Lung said.
Wed 11/18/2020 5:09 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 20 cents to $58.65/cwt.
National live was not reported due to confidentiality
Iowa-Minnesota carcass base down 10 cents to $58.85
USDA reported carcass cutout values this afternoon fell 92 cents to $77.68/cwt.
“The COVID expansion has people worried,” Virginia McGathey, with McGathey Commodities, said. “Also, the silence from China, really not doing anything with grains or with livestock from this standpoint, and it’s really making some of these markets a little more vulnerable. Certainly the hog market is vulnerable to some liquidation. But that being said, we closed on our high."
Analysts are watching hog slaughter trends, down slightly this week. “Federally inspected hog slaughter for Tuesday was estimated at 493,000 head,” Brugler Marketing said. “The week’s slaughter is 970,000 head, down 16,000 from week to week, and 21,000 head below the same week last year.”
Cattle falls back
“Today in the livestock market, cattle retreated, Virginia McGathey, with McGathey Commodities, said. “The cash trade has slowed ahead of the USDA report coming at the end of the week. Packers just seem to be less aggressive to step in with that on-feed report coming on Friday, as well as the holiday next week.”
“Hogs were higher today,” McGathey said. “They’ve been in the same channel for the past three weeks, even though losses in the cutout values has created some uncertainty and really adds some volatility to the entire market. It’s completely stalled the futures right now. We just can’t decide which way we’re going to break out.”
Watching for export reports
Analysts are looking ahead to tomorrow’s USDA export sales report, and watching for news of more sales to China. “There was still no new US soybean sales to China despite rumors of them buying US soybeans,” Steve Freed, with ADM Investor Services, said. “Asian soybean and soyoil contracts are at new highs. Talk of higher feed and food demand.”
“US weather has been great for harvesting until last week with warn and dry conditions for much of the Midwest,” Jack Scoville, with The Price Futures Group, said. “The weather has turned cooler and a little wetter in the last week and temperatures are cool this week although it is dry. Yield reports have generally been good except for the drought and derecho areas of Iowa.”
“Corn futures traded higher on talk of new US corn sales to unknown which some feel could be China,” Steve Freed, with ADM Investor Services, said. “Weekly US ethanol date was near expectations but talk of a 2021 US vaccine has some raising next year’s US corn demand for ethanol as business and travel try to get back to normal.”
“EIA’s weekly data release showed average daily ethanol production was 962,000 barrels for the week ending Nov. 13,” Brugler Marketing said. “That was down 15,000 bpd from last week. Ethanol stocks were seen at 20.203 mln barrels on the 13th, a 44,000 barrel increase from last week.”
“Soybeans trade higher but closed off session highs,” Steve Freed, with ADM Investor Services, said. “Some feel there was some late liquidation due to possible overnight rains in central Brazil and before tomorrow’s USDA export sales report. Managed funds were early buyers of 12,000 soybean, 5,000 soyoil and 3,000 soymeal.”
“The weather in the US is good for any remaining harvest as it was drier and cooler last week,” Jack Scoville, with The Price Futures Group, said. “The weather in South America is mixed. Showers and rains have fallen in northern Brazil. Southern Brazil, northern Argentina, Uruguay, and Paraguay have missed out on good rains but have seen a shower or two.”
“Wheat futures traded higher. Lower Dollar and higher corn prices offered support,” Steve Freed, with ADM Investor Services, said. “Wheat futures continue to be supported by forecast of dry weather in parts of Russia and US south plains… Virus is still raising concern about lower US/global demand for food as countries go to restaurant lockdowns.”
“The 8-14 day outlook shows increased chances for above normal temps as we head to December, with below normal chances for precipitation,” Brugler Marketing said. “Japan is tendering for 102,000 MT of wheat. Taiwan issued a tender for 82,220 MT of U.S. wheat, with a deadline of Nov 25.”