DTN Midday Livestock Comments 06/29 11:54
Cattle Futures Surge Higher at Midday
Aggressive support continues to develop through the morning as triple-digit
gains are holding in both live cattle and feeder cattle futures. Post report
shifts are leaving lean hog futures mixed Monday morning.
By Rick Kment
Strong gains in cattle futures and deferred lean hog contracts are setting
the pace for buyers to step back into the market at the end of the month. Trade
volume is light and is expected to remain that way through the rest of the week
as the focus is on the upcoming holiday weekend. Corn prices are higher in
light trade. July corn futures are 1 cent per bushel higher. Stock markets are
lower in light trade. The Dow Jones is 220 points lower while Nasdaq is down 65
Strong triple-digit gains have developed through midday as traders continue
to focus on the sharp losses seen last week, and the potential to cover
positions at the end of the month. Fundamentals have not changed, but there
seems to be very little significance to push prices aggressively lower over the
coming days. Cash cattle markets are quiet with show lists steady to slightly
higher. It is expected to be the middle to end of the week before active trade
is seen. Beef cut-outs at midday are mixed, 1.19 higher (select) and down 0.52
per cwt (choice) with light movement of 64 total loads reported (38 loads of
choice cuts, 11 loads of select cuts, six loads of trimmings, nine loads of
Firm buyer support has jumped back into the feeder cattle futures as live
cattle contracts have become the driver, and has sparked some short covering in
the lightly traded trading session. It is expected that activity will remain
light through most of the week, which may help to draw additional buyer
interest back into the seemingly oversold market.
Mixed trade continues to be seen through the morning with nearby contracts
holding moderate to strong losses following the rally in hog numbers in
Friday's hogs and pigs report. Triple-digit gains continue to develop in
deferred contracts as the expectations that farrowing will ease through the
next several months and should tighten up supplies over the long term. Prices
are expected to hover in the current range through the rest of the trading
session. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $0.79 per cwt to $72.20 per cwt with the range
from $71.66 to $75.00 per cwt on 3,128 head reported sold. Cash prices are
unreported on the Iowa Minnesota Direct morning cash hog report. The National
Pork Plant Report reported 151 loads selling with prices gaining $0.48 per cwt.
Lean hog index for 6/25 is at $78.13 down 0.49, with a projected two-day index
of $77.64 down 0.49.
Rick Kment can be reached at email@example.com
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