DTN Midday Livestock Comments 09/22 12:00
October Hog Futures Skyrocket Higher
Despite live cattle and feeder cattle futures being able to bounce off of
morning lows, buyer support remains lackluster, allowing for moderate pressure
to hold at midday.
By Rick Kment
Moderate pressure in the cattle complex is being offset by trade through the
lean hog complex. Trade remains sluggish through midday, which could limit
additional activity. Corn futures are lower at midday. December corn futures
are 2 cents per bushel lower. Stock markets are lower in light trade. The Dow
Jones is 75 points lower while Nasdaq is down 55 points.
Moderate pressure is holding across the live cattle futures market with
traders focusing on spillover pressure through the rest of the cattle and grain
complex. Trade is expected to remain sluggish through the rest of the session,
which could limit additional market movement in both nearby and deferred
contract months. Cash cattle markets remain quiet with bids undeveloped at this
point. This is not a surprise to any in the market as show lists are being
distributed, and it may be late Tuesday or early Wednesday before token bids
are seen. Packers are expected to remain short bought going into the week, but
this has not kept them from delaying trade until late in the week in the past,
and may not insure early week trade this week either. Asking prices are hard to
pin down, but expected to be seen around $162 in the South and $248 to $250 per
cwt in the North. Beef cut-outs at midday are higher, $0.91 per cwt higher
(select) and up $0.66 per cwt (choice) with light movement of 66 total loads
reported (32 loads of choice cuts, 12 loads of select cuts, 7 load of
trimmings, 14 loads of ground beef).
Moderate pressure is holding in feeder cattle futures midday Monday,
although the lack of follow through seller interest has pulled nearby contracts
nearly $1.50 per cwt off of early session lows. Traders are looking for
additional direction from both the outside market, as well as potential moves
in live cattle futures. Most of the early pressure is based on traders trying
to adjust to market projections following the greater than expected placement
of feeder cattle through August. This could continue to leave markets lower but
still lightly traded through most of the Monday session.
Mixed trade is seen through Monday morning with October and December futures
holding light to moderate gains. The inability for front month contracts to
both maintain early gains, and draw additional support into the market past the
2014 contracts, is limiting the impact any lean hog market support. Most 2015
contract months are holding light losses as traders remain uncertain just how
much additional support will develop in demand through next spring and summer.
If supplies continue to build over the next six months, it may be hard to push
additional pork through marketing channels even with lean hogs priced near $90
per cwt. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $3.88 per cwt to $100.37 per cwt with the range
from $99.58 to $105.00 per cwt on 3,437 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
adding $1.35 per cwt. Lean hog index for 9/18 is at $105.14 up 0.40, with a
projected two-day index of $105.30 up 0.16.
Rick Kment can be reached at firstname.lastname@example.org
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