[Weds]: Joe Vaclavik of Standard Grain quoted a president of a pork processing plant in China that unapproved African swine fever vaccine likely reduced the country’s hog numbers. “Since the second half of last year pig producers in China used some immature pig vaccines and caught ASF again,” he said… [Tues]: National Daily Hog and Pork Summary / National carcass base down 54 cents… USDA reported carcass cutout values this afternoon fell 95 cents… Hogs saw some higher trade early on as ribs and bellies are rising, while spot hogs and cash trade remain firm, Total Farm Marketing said…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 3/31/2021 8:16 AM
Lean Hogs - Hogs are called higher while still probing for a top, supported by strong fundamental. Though historically high, we believe there is still room to move technically higher, said Matthew Strelow of Total Farm Marketing. With the ability to shrug off a shaky start to the week, the May-July contracts closed at new contract highs. The Lean Hog Index accelerated higher, gaining 1.41 to 97.38, its highest level since October 2014. This represents the strength in countryside cash as the packers are looking to secure hogs.
Joe Vaclavik of Standard Grain quoted a president of a pork processing plant in China that unapproved African swine fever vaccine likely reduced the country’s hog numbers. “Since the second half of last year pig producers in China used some immature pig vaccines and caught ASF again,” he said.
Hog inventory down from last quarter
USDA’s March Hogs and Pigs report places the March 1 inventory of all hogs and pigs at 74.8 million head, down about 3% from last quarter and 1.8% from last March, compared to pre-report estimates of 0.1% higher. The report estimates are mostly around or below the lower end of the range of pre-report expectations and represent the first March-over-March reduction since 2014, according to Jason Franken, agricultural economist at Western Illinois University and contributor to the University of Illinois farmdoc team.
Last week's hog report will be supportive of beef prices, according to The Cattle Report. The pig report surprised many and pushed lean hog futures to life of contract highs of well over $100 after trading in the $60s not long ago. High priced pork will cause some switching, both domestically and for export, to beef.
Traders anticipate plantings report
USDA will release its annual prospective plantings report at 11 a.m. Corn acreage is expected to be 93.2 million, up from 90.8 million last year. Soybeans are expected to be at 90 million even, which would be sharply higher from the 83.1 million planted last year, said Joe Vaclavik of Standard Grain. “The idea is that row crops will pull acreage from other crops, and also that we’ll see a lower amount of preplant acreage,” he said.
The rally in the dollar helped pressure commodities and made another new multi-month high overnight before settling back, said Matthew Strelow of Total Farm Marketing. Improving U.S. Midwest and Argentina weather is offsetting drier Brazil weather. “Once today’s fundamental data is released and factored into the market, we expected weather reports to dominate market news,” he said.
Tue 3/30/2021 4:52 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base down 54 cents to $95.83/cwt.
National live was up $1.27 to $75.05
Iowa-Minnesota carcass base reported at $98.11
USDA reported carcass cutout values this afternoon fell 95 cents to $106.89/cwt.
Hogs saw some higher trade early on as ribs and bellies are rising, while spot hogs and cash trade remain firm, Total Farm Marketing said.
Hog exports “remain strong” and the market is in position to see a continued advance in the cash market, The Hightower Report said. The market is overbought, despite the higher trends, they said.
Cattle cash prices strong
Short-term cash news “remains positive” in the cattle market, despite today’s mixed to lower trading day,” The Hightower Report said. “A seasonal increase in demand and aggressive government stimulus for consumers should help support higher cash cattle trade.”
After yesterday’s lower trade, the market bounced back as there is a “continued strong advance in pork prices,” The Hightower Report said as a seasonal decline in production continues to provide support.
Grains take hit on Tuesday
As markets hit quarter-end, traders were squaring up their positions across the board, leading to lower markets, Katie Murphy of CHS Hedging said. The U.S. dollar also saw gains on inflation concerns as additional stimulus is being discussed.
Those stimulus ideas are coming as democratic senators are urging President Biden to add recurring direct payments in his economic plan expected to be unveiled on Wednesday.
Expectations for increased corn acres tomorrow weighed on the corn market today, in response to the rally in prices over the winter.
As planting season hits 50% in Texas, weather is looking supportive for planting across the country, Katie Murphy of CHS Hedging said.
China may have adequate supplies right now as their domestic corn prices are lowering, Total Farm Marketing said.
The rising U.S. dollar is adding to pressure on the soybean market, as well as fund selling in the soy complex, Katie Murphy of CHS Hedging said. Soy oil also dropped to limit-down today as weakness continues in the market.
Prices in the soybean and soyoil market “are back near key support” after their recent drops, ADM Investor Services said. “Washout was linked to weak technical signals, concern about bearish USDA report, slowdown in China buying and improved US and Argentina weather.”
The U.S. plains is still in need of moisture, but the market is not reacting to that yet, Total Farm Marketing said. “Freezes are expected this week for key wheat production areas in the U.S.,” they said, but no damage is expected.
“Improved U.S. winter wheat weather and crop outlook, lower world wheat prices and drop in world wheat demand has triggered fund long liquidation and prices trying to find a level that will encourage new demand,” ADM Investor Services said.