Beef Export Shipments Surge to Marketing Year High
Thursday November 5, 2020 @denniscattle
CORN AND SOYBEANS
Soybeans have taken out their recent highs and corn won’t be far behind. The dollar is dropping hard and fast and weather in S. America is less than ideal. Hold all bullish positions. Yesterday’s close in the Dec, above 405, was our signal that this market is ready to move and take out the highs. From here forward buy the March corn contract (stay up front) and look to add to the July/Dec corn spread. Weekly corn export sales were huge at 2.6 million tonnes, up 75% from the 4-week average.
Hogs staged an impressive recovery off the lows yesterday. Feb led the charge. In a very rare occurrence open interest from yesterday was exactly unchanged. Not sure if I’ve ever seen that before. But I’ve never seen an entire country… the entire world run in fear of a virus that is less deadly than influenza. As I’ve stated many times…there’s no playbook for trading livestock this year. Cash prices surged higher yesterday, quoted up $1.50 to up $2.50. The cutout was sluggish, down .58. So, margins narrowed again. Poor packer. Weekly pork export sales were huge at 42,200 MT, up 18% from the 4-week average. As we discounted our pork sharply last week (cutout down over $10.00) Mexico bought 14,700 MT with China buying 10,300 MT. Solid buying was noted by Japan, Korea, Canada and Colombia. Shipments were also impressive at 37,700 MT, up 3%. China shipped a record 14,600 MT followed by Mexico shipping 10,000 MT. Look for a higher open followed by a higher close today.
Live cattle open interest from yesterday was up 1852. A nice build occurred in the Feb, Apr and Jun. This is bullish. Cash trade occurred at $1.07 in the south with prices lower in the north, 104-105 and from 160-164. Grading is dropping as feedlots become very current. Weights, likely, will peak soon. My sources report a changing “mood” in the wholesale beef. This market is headed higher. Perhaps the major seasonal low I’m expecting in Dec is already in place. The chart looks to be forming a possible bull flag formation. Weekly beef export sales were very large at 20,400 MT, up 9% from the 4-week average. Japan and Korea were large buyers with China the third largest buyer of U.S. beef last week. Shipments were even more impressive at 21,400 MT, up 26% from the 4-week average and a marketing year high. I’m bullish.
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