[Fri]: The trend in hog prices has been higher this week overall, according to Total Farm Marketing, however, “a strong close into the weekend will be key for direction of prices next week”… [Thurs]: National Daily Hog and Pork Summary: National: $111.10, IA/MN: $117.09, WCB: $116.29, East:?, Cutout: $107.55 -$0.66 / “(Traders) are also concerned that China's import demand is slowing,” the Hightower Report said… “Packers are still aggressively buying – volatility is high,” Total Farm Marketing said…
Farm Commodity Newsletter/Iowa Farmer Today
Fri 4/30/2021 8:48 AM
Lean hogs - A steady decline in hog prices in China suggests they are on pace for strong expansion in their pork sector, The Hightower Report said.
U.S. prices have softened to test near-term support amid some concerns that the cash market may be nearing a top, Total Farm Marketing said.
South Korea leading in U.S. beef exports
“Despite the strong packer margins, the large supply of available cattle keeps the leverage in the hands of the packer, limiting the cash market,” Total Farm Marketing said.
South Korea is leading the way in U.S. beef exports right now, according to The Hightower Report. The largest buyer this week was South Korea at 11,712 metric tons, followed by Japan, Mexico and China. South Korea also has the most commitments so far for 2021.
The trend in hog prices has been higher this week overall, according to Total Farm Marketing, however, “a strong close into the weekend will be key for direction of prices next week.”
Factors point to new crop sales
Prices have settled down after a wild start to the week that included new highs, Total Farm Marketing said in its Sunrise Market Update today.
Grain prices are not at the highs they were last week, but are at a profitable range here, according to Seth Miller of ADM Investor Services.
“If you are one to sell new crop sales, I think this is a good place to do so, especially if you have some of the crop in the ground,” he said.
Factors which suggest follow-through selling include: improving weather for planting the U.S. crop, a slowdown in exports that could ease supply tightness concerns and news that U.S. grain prices are “rich” compared to global prices, The Hightower Report said this morning.
Thu 4/29/2021 4:33 PM
In weighted average negotiated prices for barrows and gilts, USDA reported;
National carcass base was down 42 cents to $111.10/cwt.
National live was up $1.08 to $87.31
Iowa-Minnesota carcass base was $117.09
USDA reported carcass cutout values this afternoon were 66 cents lower to $107.55/cwt.
“(Traders) are also concerned that China's import demand is slowing,” the Hightower Report said. “China was the fourth largest buyer in the weekly export sales report, which was a disappointment for the bulls. In addition, a steady decline in hog prices in China suggests they are on pace for strong expansion in their pork sector.”
“Packers are still aggressively buying – volatility is high,” Total Farm Marketing said. “Higher feeder prices may limit production keeping supplies tight. Weekly exports 35,600 MT. Hog slaughter estimated at 486,000 head. Cash lean index for April 26; up .22 @ 107.39.”
Traders wary about cattle direction
"June cattle ended slightly higher after choppy and two-sided trade early,” the Hightower Report said. “Traders remain nervous with the short-term incentive for feedlots to sell cattle sooner rather than later due to the high price for corn. The beef price rally continues to drive packer profit margins to historically high levels, but they do not see the need to bid up cattle.”
“June hogs opened slightly lower on the day and then sold off sharply, giving up all of Wednesday's gains and then some,” the Hightower Report said. “While the outlook for a seasonal decline in production into the early summer has helped support the rally, traders are nervous with the weak trend in the pork cutout market.”
Quiet day overall in ag trade
“Today seemed to be a quiet day of trade in both the ag and macro sectors,” Nick Paumen, with CHS Hedging, said. “The fund driven rally remains paused in corn, beans, and wheat so we trade weather and the planting pace. The macro sector is finding strength on hopes that we are reopening for business as usual coming out of the pandemic.”
“Some feel US corn plantings could be 40-50% done,” Steve Freed, with ADM Investor Services, said. “Over the 2 week must of the US Midwest could see normal rains. This could suggest first USDA crop rating could be above average… Talk of lower Brazil corn crop is supportive to July and could increase US export demand.”
“Not a ton for excitement in the corn market today, wheat perhaps lent some support to take the edge off the downside,” Nick Paumen, with CHS Hedging, said. “Futures are up against a strong planting pace/nice weather in the U.S. and chances for rains in the safrinha crop regions. Although some updates to their forecasts this afternoon show the 10-14 day back to being drier.”
“May corn rallied on the close into deliveries or lack of,” Steve Freed, with ADM Investor Services, said. “CN also rallied and traded near 7.47. CZ was down 1 cent and near 5.45. Talk that domestic users may want May contracts offered support. Fact cash is 13 cents over July futures supports CN-CZ spread.”
“May soybean and soyoil traded lower into deliveries,” Steve Freed, with ADM Investor Services, said. “Word of US soybean imports from Brazil may have spooked the longs. US domestic cash basis Remains firm due to positive crush margins. On Monday, USDA March Soybean crush should be near 188 mln bu. vs last year’s record 192.”
“Overall a weaker day in the soybean futures and oil, meal, and board crush saw mostly better trade,” Nick Paumen, with CHS Hedging, said. “Not a ton of fresh news today so we trade lower as the funds take a break from the buying-driven rally. Reuters put out an estimate for the USDA soybean crush report for March that will come out on Monday.”
“A bit of a bounce-back in the wheat futures as Mpls and Chi futures finish the day higher, KC missed it by a fraction of cent in May and 2 cents in July,” Nick Paumen, with CHS Hedging, said. “The HRS growing region continues to see drought conditions worsen and should support the market.”
“Wheat futures closed mixed,” Steve Freed, with ADM Investor Services, said. “Lack of May deliveries may have helped WK and MWK. Talk that there could be KC deliveries offered resistance to KWK. Forecast of drier than normal US north plains and Canada weather also supported MWN.”