[Mon]: The market seems to have already priced in the bearish short-term weakness in the cash market, but the surge in the boxed beef market opens the door for some strength in the cash market during May, The Hightower Report said this morning… Consumer demand for beef remains extremely strong and eventually packers may be needing to bid up the cash market… [Fri]: Afternoon National Slaughter Cattle Review / Choice +$2.74, Select +$3.25… In negotiated cash sales in Nebraska, the USDA reported 129 head sold dressed at $188 and 723 head sold live at $119. In Iowa/Minnesota, 405 head were sold dressed at $190 and 389 head were sold live at $119. Traders remain nervous about the short-term incentive for feedlots to sell cattle sooner rather than later due to the high price of corn, according to The Hightower Report…

 

Farm Commodity Newsletter/Iowa Farmer Today

 

Mon 5/3/2021 8:59 AM

 

Cattle - The market seems to have already priced in the bearish short-term weakness in the cash market, but the surge in the boxed beef market opens the door for some strength in the cash market during May, The Hightower Report said this morning.

 

Front month contracts posted bullish hook reversals last week, so the improved technical picture could bring some additional support today and throughout the week, Total Farm Marketing said in its sunrise report this morning.

 

Demand may push up beef cash price

 

Consumer demand for beef remains extremely strong and eventually packers may be needing to bid up the cash market. “Packer margins are extremely profitable and they will have the incentive to move as much beef as possible at the high level,” The Hightower Report said this morning.

 

Large slaughter beef numbers keep the leverage in the packers’ court as the market feels there is ample supply to meet the demand, Total Farm Marketing said this morning.

 

The pork market remains in a solid uptrend as traders see solid demand from China and a continued strong export market for US pork.

 

Brazil’s corn crop impacting prices

 

Grain calls are sharply higher to start the week and the month, said Steve Freed of ADM Investors. Corn limit has increased to 40 cents, soybean 100 cents, soyoil 350 point and soymeal $30. “Look for extreme choppy volatility to continue with U.S. export prices a premium to other origins, uncertainty over China and EU economic future and uncertain U.S. summer weather,” Freed said.

 

Portions of Iowa, southeastern South Dakota, northeastern Nebraska and southern Minnesota reported excessive heat during the weekend in the very same area that has been unusually dry in the past 30 days. “Crops and livestock were stressed by the heat and rapid soil moisture depletion resulted,” Total Farm Marketing said in its sunrise report today.

 

Corn is the most expensive feed grain in the world right now, partially based on the smaller Brazil crop, John Payne of Daniels Trading said this morning.

 

Fri 4/30/2021 4:47 PM

 

Choice rose 2.74 to $296.50/cwt.

Select went up 3.25 cents to $283.05.

 

In negotiated cash sales in Nebraska, the USDA reported 129 head sold dressed at $188 and 723 head sold live at $119. In Iowa/Minnesota, 405 head were sold dressed at $190 and 389 head were sold live at $119.

 

Traders remain nervous about the short-term incentive for feedlots to sell cattle sooner rather than later due to the high price of corn, according to The Hightower Report.

 

“Consumer demand indicators are as strong as we’ve ever seen: Getting away from COVID, getting outside to meet friends and neighbors, restaurants reopening, creating strong demand for beef. Prices are up 9% since April 15, the highest since June of 2020,” said Terry Roggensack of CME Group.

 

Hurdle for cattle futures

 

Weakening cash is posing a large hurdle for cattle futures as demand stays strong for boxed beef, according to Total Farm Marketing.

 

The macro market is feeling the pressure today from coronavirus concerns around the world and increasing inflation, according to Nick Paumen of CHS Hedging.

 

Ending week with a bang

 

Grain markets ended the week with a bang as Safras & Mercado updated their total corn crop to 104.1 MMT, down 8% from their previous estimate, according to Nick Paumen of CHS Hedging.

 

Weather issues are still key drivers of grain markets with a hot and dry forecast for Brazil and cold weather threatening France’s wheat crop, according to Total Farm Marketing.

 

A favorable weather forecast, with the U.S. Midwest looking to receive half to one and a half inches of rain in the next five days, has eased concerns about upcoming crops, according to The Hightower Report.

 

Corn

 

Talk that China will take all of U.S. unshipped open corn sales offered support and offset talk that U.S. prices were too high and Argentina corn was being exported to the U.S., according to Steve Freed of ADM Investor Services.

 

As Brazil faces extended hot, dry weather, its corn crop is expected to drop below 100 mmt.

 

Soybeans

 

Soybean traded higher on talk of higher U.S. basis and tight U.S. 2020/21 supplies, according to Steve freed of ADM Investor Services. This offset talk that U.S. soybean, soymeal and soyoil prices were too high and normal U.S. summer weather could weigh on prices.

 

Total Farm Marketing noted rumors of China cancellations of Brazilian soybeans.

 

Wheat

 

MKN rallied on continued concern about dry weather across most of US north plains and Canada prairies, according to Steve Freed of ADM Investor Services.

 

Ukraine continues to expect a better than originally thought production from their wheat crop this year with the UGA putting their estimate at 27.7 MMT, according to Nick Paumen of CHS Hedging. Exports are expected to be up 3.5 MMT from last year as well.

 

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