[Weds]: The market remains in an overbought technical condition. “This points to a loss in upside momentum,” The Hightower Report said this morning… fears that African swine fever is spreading in China, and that this will significantly lower their production and support even stronger imports has helped provide support”… [Tues]: National Daily Hog and Pork Summary / National carcass base was 27 cents lower… USDA reported carcass cutout values this afternoon were up 10 cents… Tightening hog supplies continue to be a factor for hog markets, although Tuesday showed some profit taking. “Trend is up as hog supplies tighten,” Stewart-Peterson said… “The (lean hog) market is technically on fire,” Scott Shellady, with Ag Optimus, said. “There’s good fundamentals, good technicals. We can do some rotating through to kind of cool things off a little bit, I think that’s okay. All in all, I’ve just got that one word written, bullish. Things continue to look strong. It’s perilous, but it’s still strong, so be careful about that”…
Farm Commodity Newsletter/Iowa Farmer Today
Wed 4/7/2021 8:40 AM
Lean hogs - Fundamentals are still supportive, but the hog market is over-bought and could be due for some liquidation, Total Farm Marketing said this morning.
The market remains in an overbought technical condition. “This points to a loss in upside momentum,” The Hightower Report said this morning.
Hog futures are higher as the index reached 2014 levels on Tuesday, said Brugler Marketing this morning. After printing midday lows, lean hog futures bounced to close the session 2 cents to $1.42 higher. However, April hogs remained in the red, closing 30 cents lower, Brugler said.
Beef market continues uptrend
“The cattle market could be on the verge of a breakout as feeders and live cattle are trading near multi-year highs as fundamentals support the market and money flow pushes the market higher, Total Farm Marketing said this morning.
The beef market remains in a solid uptrend and demand forces remain very positive, The Hightower Report, also noted this morning.
Solid gains in beef prices Tuesday are also helping add support to pork, The Hightower Report said this morning. Meanwhile, fears that African swine fever is spreading in China, and that this will significantly lower their production and support even stronger imports has helped provide support,” The Hightower Report said.
Price volatility lead by weather and USDA reports
“All eyes will be in USDA report on Friday,” said Steve Freed of ADM Investor Services said this morning. USDA could leave soybean and wheat numbers unchanged. Still most feel USDA will have to raise China corn imports, U.S. exports and lower U.S. carryout,” said Freed who noted that grains are slightly higher on low volumes this morning.
Jacob Christy of The Andersons expects “a lot of price volatility” as old crop deals with the demand and new crop balance sheets will trade a lot on weather- good and bad, he said this morning.
The Federal Reserve will release minutes from their FOMC meeting today at 1 p.m. “Traders are not expecting a change in interest rates and will be watching for any comments regarding the bond market,” said Kevin Stockard of CHS Hedging.
Tue 4/6/2021 4:51 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was 27 cents lower to $97.81/cwt.
National live was down 61 cents to $75.80
Iowa-Minnesota carcass base was $99.51
USDA reported carcass cutout values this afternoon were up 10 cents to $109.39/cwt.
Tightening hog supplies continue to be a factor for hog markets, although Tuesday showed some profit taking. “Trend is up as hog supplies tighten,” Stewart-Peterson said. “Some traders taking profit in light of lower cutouts. Hog slaughter estimated at 494,000 head. Cash lean index for April 1, up .41 at 99.38.”
"PA sharp rise in hams and bellies pushed the National Pork Carcass Cutout Value $5.10 higher to $114.61,” Brugler Marketing said. “CME’s Fresh Bacon Index was up another $8.68 for the week ending April 2 – now at $243.12 cwt. USDA estimated FI hog slaughter Monday at 331,000. That compares to 483,000 head last week, and 475,000 from the same week last year.”
Hogs 'on fire' and looking strong
“The (lean hog) market is technically on fire,” Scott Shellady, with Ag Optimus, said. “There’s good fundamentals, good technicals. We can do some rotating through to kind of cool things off a little bit, I think that’s okay. All in all, I’ve just got that one word written, bullish. Things continue to look strong. It’s perilous, but it’s still strong, so be careful about that.”
He said the last year has seen tremendous changes in markets. “What a difference a year makes,” Shellady said. “We talk about that a lot. This time last year the July contract was around 70; it just recently made a run at 105. Wow, that’s a big difference. That’s a great gain for the producer… A good example of what a difference a year makes.”
Friday report taking focus of traders
Soybeans moved higher Tuesday, as all crop markets looked ahead to Friday’s WASDE report. “Soybeans traded higher today, with the May contract holding above its 20-day moving average at $14.11 ¼,” Michaela White, with CHS Hedging, said. “The market continues to focus on tight U.S. ending stocks that are anticipated to shrink on Friday’s report.”
Crop market analysts were also watching the energy and equity markets to see what impact they might have. “Energy markets were higher today, rebounding after steep losses yesterday,” White said. “Equity markets were mostly lower on light volume as the markets take a pause following sharp gains on strong economic data.”
Corn markets did not have much new news to drive markets on Tuesday. “Corn traded the day mixed, with new crop slightly higher and the deferred months trading lower,” Michaela White, with CHS Hedging, said. “There continues to be little fresh news as attention turns towards Friday’s report, and then weather to follow as planting picks up speed.”
Traders were watching export news and looking ahead to the next WASDE report. “Friday’s WASDE report expect to see higher exports,” Stewart-Peterson said. “US corn export sales have reached 2.587 bln bushels with 5 months to go. Corn inspections last week were 75.3 mln bushels. Vaccines continues to give hope to economic rebound.”
Analysts are watching to see what export adjustments the USDA makes in Friday’s report. “Soybean oil continues to push soybean futures higher,” Stewart-Peterson said. “Trade expects USDA to raise US exports in Friday’s report. Brazil soy prices still 84 cents cheaper than US. Argentina expected heavy rains, create harvest delays.”
“The average trade estimate for U.S. ending stocks on Friday’s WASDE report is 118 mln bushels, down from 120 mln bushels on the March report,” Michaela White, with CHS Hedging, said. “Agroconsult, a Brazilian consulting agency, predicts that Brazil’s soybean crop for 2020/2021 will be 137.1 mln tonnes, which is a record crop.”
“The season’s initial national winter wheat ratings were reported at 338 on the Brugler500 Index,” Brugler Marketing said. “In South Dakota winter wheat ratings were just a 299 on the Brugler500, as dryness afflicts the 760,000 acres of winter wheat. NOAA’s 5-day QPF shows rain across the Eastern Corn Belt and high plains.”
Traders were also watching the global wheat market news. “Taiwan issued a tender for 96,485 MT of U.S. wheat,” Brugler Marketing said. “Ethiopia is tendering for 30,000 MT of wheat. Algeria is on the market for an unspecified amount of optional origin wheat. Egypt’s GASC wheat tender results will be released later today.”