DTN Midday Livestock Comments 12/20 11:46
Live Cattle Future Find Support
Active buyer support quickly developed in December and February live cattle
futures Friday morning. Traders are focusing on the potential for additional
firmness following the afternoon cattle on feed report as well as late week
By Rick Kment
Strong gains quickly developed through live cattle futures Friday morning.
This eroded the early pressure in both the lean hog and feeder cattle futures
and helped to push most contracts moderately higher at midday. Pre report
positioning is one of the main focuses in live cattle and feeder cattle
contracts through the remainder of the session. Corn futures are higher at
midday. March corn futures are 1 cent per bushel higher. Stock markets are
higher in light trade. The Dow Jones is 96 points higher while Nasdaq is up 46
Sharp gains have quickly developed in live cattle futures following
end-of-week commercial buyer interest stepping back into the market. Steady to
higher cash cattle trade in Nebraska seems to be offsetting any pressure in
both the South and also strong pressure seen in boxed beef values Friday.
February futures are holding gains of $1.05 per cwt at midday, which is helping
to keep buyers looking for additional end of the session support. The potential
for lower than earlier estimates in cattle on feed numbers released in the
afternoon report is also helping to draw additional firmness to the complex.
Cash cattle markets are quiet Friday morning following the moderate to active
trade which developed Thursday. It is uncertain if packers have gained enough
cattle for the upcoming holiday week or if they will have to make one more trip
to the well to finish their Christmas shopping so to speak. Asking prices on
cattle still left on show lists are listed at $132 in the South and $210 in the
North. Beef cut-outs at midday are lower, $1.61 per cwt higher (select) and
down $1.65 per cwt (choice) with light movement of 68 total loads reported (27
loads of choice cuts, 30 loads of select cuts, one load of trimmings, 10 loads
of ground beef).
Light trade is seen through feeder cattle futures early Friday morning,
which is not unexpected given traders preparing for the upcoming holiday weeks.
Strong gains in live cattle futures which developed midmorning has drew
additional buyer interest off of the sidelines. Even though no significant
surprise is expected in the afternoon cattle on feed report, traders are taking
advantage of the potential of tighter supplies over the near future.
Lean hog futures continued to show pressure through most of the morning,
although the strong surge higher in live cattle futures has drawn buyers back
into the hog markets late in the week. All but February lean hog futures are
now trading higher at midday, although these gains remain limited due to
sluggish activity. Cash prices are lower on the National Direct morning cash
hog report. The weighted average price fell $0.05 per cwt to $76.96 per cwt
with the range from $74.75 to $77.22 per cwt on 2,145 head reported sold. Cash
prices are unreported due to confidentiality on the Iowa Minnesota Direct
morning cash hog report. The National Pork Plant Report reported 172 loads with
prices adding $0.95 per cwt. Lean hog index for 12/17 is at 80.59 down 0.18,
with a projected two-day index of $80.55 down 0.04.
Rick Kment can be reached at email@example.com
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