DTN Midday Livestock Comments 07/24 11:46
Pressure Redevelops in Hog Complex
Sharp losses are holding across the hog complex, but the ability to move
nearby futures off of limit lows could help to re-establish light buyer support
this afternoon. Cattle futures are mixed to mostly higher at midday, despite
trading in wide ranges on both sides of the market through the morning.
By Rick Kment
Sharp losses are seen in lean hog futures midday Thursday. But since nearby
hog contracts have moved back away from limit-down trade, some light support is
developing in the complex. Cattle futures have remained mixed through most of
the morning, quickly moving back and forth from moderate gains to moderate
losses due to light volume. Corn futures are lower at midday. September corn
futures are 2 cent per bushel lower. Stock markets are higher in light trade.
The Dow Jones is 6 points higher while Nasdaq is up 5 points.
Market direction has been hard to establish in live cattle futures Thursday
morning with prices moving higher and lower and buyers and sellers quickly
jumping in and then back out of the market. This volatility has created a
trading range of $3.30 per cwt in the front-month August contract, although
most of the trading day has seen prices within $1 lower to $1 higher per cwt.
The lack of direction could lead to moderate to wide price swings through the
end of the session. Strong support in both cash markets and beef values are
pointing to follow-through buyer support, while the lean hog market is lending
some weakness to the complex at midday. Cash cattle markets were spurred on by
developing interest which started Wednesday. This continued Thursday morning
with active bids seen in all areas of cattle country as prices are generally $6
to $10 per ton higher than last week's levels. It is uncertain just how much
trade will take place Thursday and if there will be any clean-up activity left
for Friday. Asking prices are at $164 and higher in the South and $258 and
higher in the North. Beef cut-outs at midday are higher, $3.78 per cwt higher
(select) and up $3.28 per cwt (choice) with active movement of 102 total loads
reported (58 loads of choice cuts, 31 loads of select cuts, 4 load of
trimmings, 10 loads of ground beef).
Although feeder cattle futures have bounced all over the place through the
morning, midday price ranges are mixed in a narrow range as very little
additional direction is developing across the complex. There have been times of
moderate to strong buyer support which have pushed prices higher, but the lack
of overall volume in the market has been unable to sustain these gains.
The major accomplishment in the lean hog futures is that prices have moved
off daily trading limit losses and are now down $1.30 to $2.40 per cwt.
Although this is still extremely bearish for the lean hog market as a whole,
the indication that selling pressure may be subsiding a bit could help to
support market activity through the end of the week. The lack of fundamental
support seen in the hog market is still a major obstacle for traders to look
past, but late-day short-covering could help to create some stability in the
otherwise shaky market. Cash prices are lower on the National Direct morning
cash hog report. The weighted average price fell $1.55 per cwt to $123.44 per
cwt with the range from $113.00 to $124.55 per cwt on 3,465 head reported sold.
Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct
morning cash hog report. The National Pork Plant Report is reported 131 loads
selling as prices falling $0.65 per cwt. Lean hog index for 7/22 is at 132.04
down 0.53, with a projected two-day index of $131.09 down 0.85.
Rick Kment can be reached at firstname.lastname@example.org
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