DTN Midday Livestock Comments 08/31 11:55
Hog Futures Hold Solid Gains Monday Morning
Firm buyer support is holding in nearby and deferred lean hog futures, while
cattle contracts struggle for consistency. Softness in beef values is adding to
pressure in live cattle contracts.
By Rick Kment
Wide price swings have been seen Monday morning with live cattle futures
eroding as the session continues and feeder cattle unable to hold gains over $2
per cwt in nearby contracts. Lean hog futures are showing the most steady and
optimistic support through the morning with firm gains well rooted in nearby
and deferred contracts. Corn prices are mixed in light trade. September corn
futures are 1/4 cent per bushel higher. Stock markets are lower in light trade.
The Dow Jones is 43 points lower while Nasdaq is down 10 points.
Moderate pressure has held through the live cattle complex during morning
trade despite the strong push higher in feeder cattle. Traders are focused on
the lack of support in beef values as well as softness seen late last week in
the cash market. Each day as the Labor Day weekend gets closer, the more
concern about lackluster beef demand over the holiday is affecting the entire
live cattle market. Traders were looking for a strong boost in beef values to
hopefully carry the market into the fall and winter months, but it seems buyer
interest remains mediocre at best, which could lock the market into a choppy
range. Cash cattle activity remains generally quiet Monday with show lists
generally smaller around the region. A few bids are developing Monday in the
South which is out of character for this early in the week. But with little to
no cash trade developing in the South last week, packers are showing the need
for additional cattle. Asking prices are still hard to pin down, but expected
to remain around $150 per cwt in the South and $232 and higher in the North.
Beef cut-outs at midday are lower, $0.40 Lower (select) and down $0.80 per cwt
(choice) with light movement of 63 total loads reported (41 loads of choice
cuts, 9 loads of select cuts, 1 load of trimmings, 12 loads of ground beef).
Feeder cattle futures are mired in volatility once again Monday as early
pressure gave way to triple-digit gains, only to be met by additional
resistance, especially in deferred contracts. The inability to draw any
significant support into the live cattle market is sparking some additional
late morning uncertainty and has kept front-month September futures the only
contract holding triple-digit gains. Some additional wide market shifts are
expected through the remainder of the session.
Lean hog futures have been able to draw additional strong buyer support back
into the complex early Monday. The focus on collecting even additional buyer
support as nearby lean hog futures battle back from midmonth losses seems to be
helping to spark some consistency in the "higher prices are still developing"
camp. This could draw increased activity, although the focus will continue to
be on nearby contracts and the ability to manage current supply levels during
the next couple of months. Cash prices are lower on the National Direct morning
cash hog report. The weighted average price fell $0.52 per cwt to $70.86 per
cwt with the range from $69.30 to $72.00 per cwt on 5,878 head reported sold.
Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The
weighted average price fell $0.24 per cwt to $71.88 per cwt with the range from
$69.30 to $72.00 per cwt on 2,888 head reported sold. The National Pork Plant
Report reported 112 loads selling with prices adding $1.85 per cwt. Lean hog
index for 8/26 is at $78.68 down 0.11, with a projected two-day index of
$78.28, down 0.40.
Rick Kment can be reached at firstname.lastname@example.org
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