DTN Midday Livestock Comments 08/22 12:01
October Live cattle Futures Push Higher
Moderate to strong gains redeveloped in live cattle futures despite
continued pressure in feeder cattle prices. Traders are doing late-day
pre-report positioning before closing bell. Expectation of lower placement and
cattle on feed numbers could shift market activity late Friday.
By Rick Kment
Moderate to strong buyer support redeveloped in live cattle futures despite
further pressure in beef values and lackluster cash market activity. Lean hog
futures are mixed as nearby futures are focused on position squaring in front
of the weekend following Thursday's market bounce. Corn futures are higher at
midday. September corn futures are 3 cents per bushel higher. Stock markets are
mixed in light trade. The Dow Jones is 9 points lower while Nasdaq is up 13
Moderate to strong buyer support is quickly redeveloping in live cattle
futures Friday morning. October contracts are leading the complex higher with a
$1.07 per cwt rally. This support is expected to help draw additional focus on
the reduced cattle numbers in feed yards after the cattle on feed report is
released later in the afternoon. But the focus on an oversold market situation
is likely to be the main momentum to keep prices elevated through closing bell.
Cash cattle activity remains sluggish with bids redeveloping at $154 live basis
and $242 per cwt dressed basis. At this point packers remain short bought. But
even though numbers would indicate that trade may need to develop, it is
uncertain just how aggressive buyers will be. Or will they wait until next week
and pick up some early week loads to fill in processing schedules. Asking
prices are at $154 to $155 in the South and $244 to $245 per cwt in the North.
Beef cut-outs at midday are lower, 0.75 per cwt lower (select) and down $0.26
per cwt (choice) with light movement of 87 total loads reported (50 loads of
choice cuts, 16 loads of select cuts, 13 load of trimmings, eight loads of
Last-minute price adjustments are starting to develop through the feeder
cattle futures with the focus squarely being placed on the upcoming cattle on
feed report. Most expect strong placement drops to be seen in the report, but
given the weakness in the complex over the last several days, even expected
losses of 10% from year ago levels may still be viewed as bearish to the
market. The momentum shift over the last couple of weeks could make it
extremely difficult to line up a consistent bullish argument no matter what
placement of supply numbers come is on Friday's report.
Nearby lean hog futures are showing evidence of position-squaring following
the strong support which developed Thursday, and pre-weekend selling. This has
pushed October futures 60 cents per cwt lower at midday, but selling volume
remains limited, likely limiting additional losses through the end of the
session. The late week surge has helped to bring some solid support into
deferred futures even though prices are unable to hold significant morning
gains. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $2.04 per cwt to $94.22 per cwt with the range
from $88.00 to $94.36 per cwt on 1,725 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 180 loads selling as prices
up $0.58 per cwt. Lean hog index for 8/20 is at 107.19 down 2.08, with a
projected two-day index of $104.99 down 2.20.
Rick Kment can be reached at email@example.com
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