DTN Midday Livestock Comments 10/29 12:10
Front-End Lean Hog Futures Pressured at Midday
Nearby lean hog contracts are significantly lower in late-morning action,
pressured by follow-through selling and defensive fundamentals. At the same
time, the cattle complex is mixed with live issues mostly lower and their
feeder counterparts moderately higher.
By John Harrington
DTN Livestock Analyst
Cattle buying interest at midweek remains guarded with just a few
preliminary bids noted in parts of the North at $263 dressed and $165 live.
Asking prices are firm at $172-$173 in the South and $270-plus in the North.
Significant trade volume is likely to be postponed until sometime Thursday or
Friday. According to the midday report, the national hog base is $2.13 lower
compared with the Prior Day settlement ($83.00-$87.00, weighted average
$84.63). Corn futures are generally 3-4 cents higher near the top of the noon
hour, supported by solid buying in the bean pit. The stock market is drifting
lower so far as Wall Street awaited a monetary-policy decision from the Federal
Reserve. The Dow is off 19 points with the Nasdaq down by 27.
Futures are mostly 20 to 77 lower. The live pit is moderately lower going
into the final hour of pit business. Selling seems tied to profit taking and
caution before the development of late-week cash business. Ideas of cash
stability/firmness should work to check the development of substantial
bearishness. Beef cut-outs are sharply higher at midday, up $0.96 (select,
$240.06) to $2.49 (choice, $254.05) with light to moderate box movement (40
loads of choice cuts, 38 loads of select cuts, 12 loads of trimmings, 25 loads
of coarse grinds).
Futures are up 27 to 85. Feeders are moderately higher near midday in light
trade volume. The board is girded by short covering and the premium status of
the cash index.
Futures are mostly 20 to 180 lower. Although token firmness is scattered in
the far deferreds at this time, most contracts continue to trend lower. Selling
interest is particularly focused on the first three contracts where
triple-digit damage is evident. Fourth-quarter fundamentals continue to send
off bearish vibes. Spot December apparently feels the necessity to keep
backpedaling as the cash index falls at a faster and faster rate. The carcass
value showed some improvement at midday thanks to better demand for loins and
bellies. Pork cut-out: $98.82, up $1.10. CME cash lean 10/27: 96.59, off $1.81
(DTN Projected lean index for 10/28: $94.61, off $1.98).
John A. Harrington can be reached at email@example.com
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