DTN Midday Livestock Comments 03/26 11:35
Live Cattle Futures Fade at Midday
Early support in the cattle complex was unable to be maintained midday
Thursday as lack of additional buyer support is allowing additional softness to
develop through the entire complex.
By Rick Kment
Cattle trade remains under pressure with losses continuing to develop
through the morning despite showing positive moves in early trade. The focus
through the complex is likely to be driven by additional moves in cash markets
in both the cattle and hog complex. Corn prices are lower in light trade. May
corn futures are 4 cents per bushel lower. Stock markets are lower in light
trade. The Dow Jones is 21 points lower while Nasdaq is down 14 points.
Live cattle futures have eroded at midday with the tone of the market
unsettled with traders looking for additional direction from both cash markets
as well as beef values. The most significant pressure is seen in fourth quarter
trade, although the general consistency of pressure through the entire complex
is indicating that most traders are willing to step back from the market and
allow prices to erode through the end of the week. Cash cattle trade is still
undeveloped, although bids are starting to be seen in both the North and South.
But any bids seen are well below asking prices and unlikely to get much
attention at this point. Asking prices are around $165 and higher in the South
and $266 to $268 in the North. Beef cut-outs at midday are higher, $0.12 higher
(select) and up $0.45 per cwt (choice) with moderate movement of 90 total loads
reported (39 loads of choice cuts, 18 loads of select cuts, 12 loads of
trimmings, 22 loads of ground beef).
Light pressure is seen through the livestock futures market following early
market support which was seen near opening bell. The lack of follow through
support seen in the complex seems to be indicating some uncertainty about just
how much additional support may develop over the coming days. If prices are
unable to see significant additional market support, the ability to create
stability through the month of April could speak volumes in the complex as
traders continue to focus on the market supply situation.
Strong triple-digit support is seen in nearby lean hog futures contracts as
traders focus on the potential to stabilize cash market prices through midweek.
Even though significant market support may not quickly develop, the previous
market pressure has created the opportunity to draw firm buying support back
into the market. Cash prices are unreported on the National Direct morning cash
hog report. Cash prices are lower on the Iowa Minnesota Direct morning cash hog
report. The weighted average price fell $1.10 per cwt, to $55.10 with a full
range of $50.00 to $56.22 per cwt on 213 head selling. The National Pork Plant
Report is reported 160 loads selling as prices gaining $1.51 per cwt. Lean hog
index for 3/24 is at $61.31 down 0.50, with a projected two-day index of $60.81
Rick Kment can be reached at firstname.lastname@example.org
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