Dennis Smith from Archer Financial Services, July 28 2020

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MORNING LIVESTOCK REPORT  By Dennis Smith

Follow me on Twitter @denniscattle

Tuesday July 28, 2020

CORN AND SOYBEANS: Excellent crop condition ratings are forcing traders to dial in above trend yields. The most recent weather models are putting more rain into western IA which is the current trouble spot in the Corn Belt. We sold soybean oil yesterday and we’ve been actively hedging production in corn and soybeans. The rally into the fourth of July was the rally to sell and we were there. Corn never gave a second chance. However, soybeans recovered and gave one a second chance to sell last week.

LEAN HOGS:

Cash is called higher, up .50 to $1.50. The late report from yesterday confirmed that the national weighted average price was up $4.75. Packers are looking for hogs, needing hogs with the negotiated volume yesterday at 17K. The volume of pork loads last week was very large in excess of 4,000. Yet the Sat kill projection stands at 190K and the weekly harvest projection is expected to be up nearly 11% from last year. In tandem with the weakening dollar and low pork prices, demand, huge demand appears to be surfacing for U.S. pork.I’m expecting a gap higher open today. Open interest surged higher yesterday, rising by 2630.

LIVE CATTLE:

IA reports a about 400 head yesterday at $157 and 99 cents, steady with last week. This is not enough volume to call it a market. The beef was mixed. Like pork, the volume of beef slated for export from last week was huge, reported at 1750 loads, the largest ever. This indicates that nearly one fourth of beef production last week is moving to the export market, more than double the norm. Feeders appeared to put in a top yesterday. I’m expecting both markets to press downward. Feeders off the chart pattern and technical action and LC due to the premium to the cash steer market. It’s difficult to imagine domestic demand at this time of year creating any kind of meaningful power in the cutout values. Look for a lower close.

The risk of loss in trading futures and options on futures can be substantial. The author does not guarantee the accuracy of the above information, although it is believed that the sources are reliable and the information accurate. The author assumes no liability or responsibility for direct or indirect, special, consequential or incidental damages or for any other damages relating or arising out of any action taken as a result of any information or advice contained in this commentary. The author disclaims any express or implied liability or responsibility for any action taken, which is solely at the liability and responsibility of the user. This report is a solicitation.

 

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