[Tues]: Cash trade is still yet to develop this week but selling pressure hit the front end of the market Monday, Total Farm Marketing said… Cattle markets are dealing with a “clash” of high grain selling and surging beef demand, The Hightower Report said… [Mon]: Afternoon National Slaughter Cattle Review / Boxed beef cutout values this afternoon were higher on Choice and steady on Select… In negotiated cash sales in Nebraska, the USDA reported 4,656 head sold live for $117.50-119, and no dressed sales. In Iowa/Minnesota, there were 158 head sold live for $117, and no dressed sales…
Farm Commodity Newsletter/Iowa Farmer Today
Tue 5/4/2021 8:33 AM
Cattle - Cash trade is still yet to develop this week but selling pressure hit the front end of the market Monday, Total Farm Marketing said. “Technically, the June contract is weak, closing the month of April with a negative reversal, and with cattle supplies being heavy, may have a difficult time getting a bid, despite the strong demand.”
Meanwhile, the feeder market is “struggling to find a bottom as well,” Total Farm Marketing said. Action in that market will be tied to the grain markets, they said.
Hogs strong, cattle watching feed prices
The hog market “remains strong,” Total Farm Marketing said. New highs and strong technical charts are helping keep fundamental support high, they said as the market may continue to find highs.
Cattle markets are dealing with a “clash” of high grain selling and surging beef demand, The Hightower Report said. “The technical action continues to look bearish, but the market is oversold and beef prices are at a historically high price.”
Grains up, but outside markets worry about inflation
Grains are mostly up this morning, highlighted by double-digit gains in corn and soybeans, Ami L. Heesch of CHS Hedging said. This continues their roller coaster patterns in recent days.
Potential interest rate hikes and economic growth is firming up the U.S. dollar recently, Ami L. Heesch of CHS Hedging said.
John Payne of Daniels Trading said referenced an interview with Warren Buffett, noting that inflation problems may be coming. “It is interesting to see the take on this economy from someone with some skin in the game, relative to those watching from the pressbox,” Daniels said.
The next major USDA report, May Supply and Demand, is scheduled for next Wednesday, May 12.
Mon 5/3/2021 4:47 PM
Boxed beef cutout values this afternoon were higher on Choice and steady on Select, the USDA said.
Choice rose $2.80 to $299.30/cwt.
Select was up 74 cents to $283.79.
In negotiated cash sales in Nebraska, the USDA reported 4,656 head sold live for $117.50-119, and no dressed sales. In Iowa/Minnesota, there were 158 head sold live for $117, and no dressed sales.
“December corn was up sharply earlier in the session, and this may have encouraged cattle traders to sell the futures on ideas that feedlot operators are anxious to sell due to high feed prices,” the Hightower Report said. “Cash cattle have been trending lower the last couple of weeks despite strong beef prices.”
“Carcass weights ticked up to 530 lbs, and weekly production was 550.2 mln pounds, in-line with last week,” Total Farm Marketing said. “Those numbers, even with the strong demand has the market feeling that the production is there to meet demand. Beef retail carcasses are pricing in spring holidays, Mother’s Day and Memorial Day, helping push retail carcass values higher.”
Corn prices hurting cattle futures
December corn’s rise may have encouraged cattle traders to sell futures. “June cattle starting out the week with a negative technical setup and an outside day lower,” the Hightower Report said. “The market gapped above Friday's high on the open, and in the space of an hour it took out Friday's low and came close to taking out last week's 2 1/2-month low.”
“June hogs gapped higher this morning and closed into new contract highs,” the Hightower Report said. “The nearby contract traded to its highest level since August 2014, when the presence of African swine fever in China was first confirmed. Traders expect US pork exports to stay strong despite a dropoff in sales over the past few weeks.”
Volatility hits grains to open week
It was a volatile day for grain markets, finishing mixed. “Grains started the month of May with a shot of volatile trading on both sides of unchanged in most markets,” Jim Warren, with CHS Hedging, said. “Continued concern about South American dryness coupled with a fast week of planting allows differing market opinions to feed that volatility.”
Soybeans rose overnight but finished mixed in today’s trading. “Since mid-April, May soybean futures have rallied 1.30,” Total Farm Marketing said. “To give up 0.40 today from their highs is a disappointment for bullish traders yet one cannot argue with the overall trend that remains higher. It could very well be, however that prices may have found their peak.”
“A surge higher overnight gave us new contract highs in the July contract, but other contract months turned negative during the day session and closed well off their highs with slight losses,” Jim Warren, with CHS Hedging, said. “A continued dry forecast for Brazil’s Safrinha corn area is keeping support in this market.”
"Export inspections at 84.2 mln were termed supportive,” Total Farm Marketing said. “…Today’s total inspection number places the year-to-date total at 1.708 bln bu. and 63.9% of the total expected export sales. Inspections would need to average near 60 mln bushels per week. This appears doable.”
Soybeans faltered after the market opened, with a variety of factors working for and against the market. “Soybean Oil and Canola both made new contract highs in the first 4 contracts, but the rest of the oilseed complex did not, and in fact faltered after the 8:30 a.m. opening to the day session,” Jim Warren, with CHS Hedging, said.
“There was talk about follow through buying from Fridays gains,” Steve Freed, with ADM Investor Services, said. “Lower US Dollar and talk of increase demand offered support. Fact CBOT increased price limits may have triggered some spec long liquidation… Some feel prices have not topped and first sign of ridging in west Midwest will be the next chance to buy futures.”
Rains and improving crop conditions pushed wheat markets lower to begin the week. “Wheat in KC and Chicago had the biggest moves in the grains today, with weakness on recent rains and expected improving conditions,” Jim Warren, with CHS Hedging, said. “Paris futures were also lower today. Spring wheat planting progress advanced sharply last week.”
“Wheat futures traded lower. Talk of better weather in Europe and Black Sea offered resistance,” Steve Freed, with ADM Investor Services, said. “The 2-week US forecast hints of possible rains across parts of the US north plains may have also triggered some selling. Most look for US HRW weekly crop ratings could drop this week. US spring wheat plantings could be ahead of average.”