DTN Midday Livestock Comments 02/26 11:33
Sharp Gains Hold In Cattle Futures
Strong gains continue to hold through the cattle futures complex Thursday as
buyers are quickly jumping back into the complex following the recent market
slide. Morning gains continue to draw additional interest through the rest of
By Rick Kment
Strong triple-digit gains continue to hold through the live cattle and
feeder cattle futures. The aggressive $4 per cwt gains in February contracts
are misleading due front month contracts nearing expiration where daily trading
limits are not in place. Feeder cattle futures are trading nearly $3 per cwt
higher as buyers are flooding back into the market. Corn prices are higher in
light trade. March corn futures are 5 cents per bushel higher. Stock markets
are mixed in light trade. The Dow Jones is 23 points lower while Nasdaq is down
Soon to expire February futures contracts are leading the market higher as
daily limits are not in place for front month contract. This has allowed front
month futures to hold $4 per cwt gains with prices moving above $162 per cwt.
Other nearby contracts are holding gains between $2 and $3 per cwt although
price ranges are developing between $141 and $149 per cwt. The ability to hold
current market support could help to instill long-term buyer support through
the remainder of the spring months as more focus on demand growth will develop.
Cash cattle trade is still undeveloped through the morning Thursday. Bids are
redeveloping in the North at $250 to $252 per cwt although no interest is seen
in the South since the recent rally in the futures market. Asking prices remain
at $162 and higher in the South and $260 to $262 in the North. Beef cut-outs at
midday are higher, $0.25 higher (select) and up $1.03 per cwt (choice) with
light movement of 63 total loads reported (28 loads of choice cuts, eight loads
of select cuts, 10 loads of trimmings, 16 loads of ground beef).
Follow-through buying is seen in feeder cattle futures during the morning
Thursday. March through August futures are trading from $2.90 to $2.95 per cwt
higher at midday with the focus strong gains in both live cattle and feeder
cattle markets. The ability to hold recent buyer support through the end of the
session could help to redevelop long-term buyer interest back into the market.
All contracts through October are holding gains near $3 per cwt.
Feeder cattle futures have quickly turned lower Thursday morning with the
inability to draw buyer support back into the market has sparked wide ranging
losses. Triple-digit losses are seen through contracts through October 2015 as
the fear that the recent aggressive buyer support may create some late-month
pressure as traders square positions. Even though strong losses are expected to
hold through the end of the session, it is uncertain just how much long-term
damage this will develop across the complex over the next few trading sessions.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price fell $0.64 per cwt to $64.36 per cwt with the range from
$62.16 to $67.00 per cwt on 5,043 head reported sold. Cash prices are higher on
the Iowa Minnesota Direct morning cash hog report. The weighted average price
added $0.56 per cwt to $66.60 per cwt with the range from $64.50 to $67.00 per
cwt on 2,220 head reported sold. The National Pork Plant Report is reported 237
loads selling as prices falling $1.58 per cwt. Lean hog index for 2/24 is at
$62.06 up 1.18, with a projected two-day index of $63.38 up 1.32.
Rick Kment can be reached at firstname.lastname@example.org
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