[Weds]: Front-month lean hog futures ended the session 35 cents to $1.17 higher, to prices not seen since July 2019, said Alan Brugler of Brugler Marketing. Pork cutout futures ended the first trade day of a short week with triple-digit gains of at least $1.20 in the front months… [Tues]: National Daily Hog and Pork Summary / National Carcass base up $2.47… USDA reported carcass cutout values this afternoon down $1.55… Lean hogs continue to shoot higher and all in all things look pretty good, according to Scott Shellady of the CME Group. But he cautions that any time a chart is this steep it raises some yellow flags. Just be careful, he advises, saying there could be short-term reactions to that steep curve…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 2/17/2021 8:39 AM
Lean Hogs - Front-month lean hog futures ended the session 35 cents to $1.17 higher, to prices not seen since July 2019, said Alan Brugler of Brugler Marketing. Pork cutout futures ended the first trade day of a short week with triple-digit gains of at least $1.20 in the front months.
The market is still probing for a short-term peak as the bitter cold weather likely slowed performance and should pull weights down to more normal levels, according to The Hightower Report. The USDA pork cutout, released after the close yesterday, came in at $88.06, down $1.17 from $89.23 on Monday but up from $84.24 the previous week. Keep in mind; cutout values last year and two years ago were near $63.
Hogs, cattle slightly higher
The lean hog index traded strongly higher, gaining 2.18 to 74.54, reflecting the cash market, said Matthew Strelow of Total Farm Marketing. In addition, retail values, trading near $90 is nearly $25 over last year, and product movement has been strong, reflecting the demand in the pork product market. However, the futures market is overbought and support from a strong winter storm may begin to wane and allow prices to ease.
Cattle futures are called steady to higher within a supportive technical picture as money flow favors managed money building a long position, said Matthew Strelow of Total Farm Marketing. Positive cash trade will likely be needed to maintain the upside with the premium of the market to cash. Cash was undeveloped on Tuesday, with no bids reported and asking prices at $116.
Cold weather could increase food and fuel demand
Bitter cold temperatures continue to push energy prices higher. Some feel cold could increase fuel and feed demand and slow domestic logistics, said Steve Freed of ADM Investor Services.
Grains were mixed overnight, with wheat giving back some of yesterday’s gains while corn and beans have yet to find a foothold in either direction, said Jacob Christy of The Andersons. “It feels like the markets are searching for that next catalyst,” he said.
Net drying is expected across a majority of Argentina through next Tuesday, said Steve Freed of ADM Investor Services. Crop stress is unlikely to become very serious in the first week of the outlook; however, greater rain will be needed in the second week. Conditions in much of Brazil will continue to be favorable.
Tue 2/16/2021 4:22 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National Carcass base up $2.47 to $69.56.
The national live rate was unreported due to confidentiality.
Iowa-Minnesota carcass base was $69.71.
USDA reported carcass cutout values this afternoon down $1.55 at $89.71.
Lean hogs continue to shoot higher and all in all things look pretty good, according to Scott Shellady of the CME Group. But he cautions that any time a chart is this steep it raises some yellow flags. Just be careful, he advises, saying there could be short-term reactions to that steep curve.
There are ideas in the market that winter storm disruptions could cause a tighter supply just ahead and that weights could come down, according to The Hightower Report.
Cattle, hogs higher but feeders fall
April cattle closed higher on the session but well off the highs while April hogs closed sharply higher but stayed within Friday’s trading range, according to The Hightower Report.
Cold weather is causing some livestock stress and that is an issue in the market this week, according to Total Farm Marketing.
Grains close with gains to start week
The commodity markets traded higher on cold temperature, decent export sales, delays in the South American harvest, and tightening stocks, according to CHS Hedging.
The winter weather is creating logistical problems for agriculture, according to Karl Setzer of Agrivisor, who says country movement is practically non-existent and river logistics are also being disrupted as ice slows barge movement.
Corn futures ended higher on good weekly export numbers and talk of higher total U.S. corn demand, according to ADM Investor Services.
The corn market traded higher in sympathy with the rally in the wheat market and prices drew addition support from solid weekly export numbers, according to CHS Hedging. On the flip side, there is some talk that ethanol plants may be reducing production and selling their natural gas inventory in response to the widespread cold weather conditions.
The soybean market traded higher on delays in the Brazilian soybean harvest and a strong crush pace, according to CHS Hedging.
Logistics are an issue in Brazil this harvest season, including those at the main port, according to Karl Setzer of Agrivisor.
Wheat prices got some legs from frigid temperatures across the plains and concerns the wheat crop could incur some damage, especially in areas with less than adequate snow cover, according to CHS Hedging.
Australian officials have updated their wheat crop estimates now that the harvest there is nearly complete and the crop is now projected at 33.3 million metric tons, nearly twice as much wheat as Australia produced last year when weather caused major problems, according to Karl Setzer of Agrivisor.