DTN Midday Livestock Comments 03/31 11:57
Strong Hog Market Support Continues
Gains continue to develop through the entire lean hog complex as additional
traction from the bullish hogs and pigs report is creating increased buyer
interest. Early support in cattle trade has quickly eroded following lack of
buyer interest after corn markets turned lower.
By Rick Kment
Follow-through buyer support continues to develop through the lean hog
complex with moderate to strong gains holding at midday based on expectation of
tighter supplies through the last half of the year. Cattle futures have turned
lower following mixed trade through much of the morning. The focus through the
cattle complex is based on the ability to sustain demand while also focusing on
potentially weaker corn markets. Corn prices are lower in light trade. May corn
futures are 12 cents per bushel lower. Stock markets are lower in light trade.
The Dow Jones is 98 points lower while Nasdaq is down 21 points.
Moderate pressure is developing across the live cattle complex at midday as
pressure in feeder cattle and the corn complex is leading to lack of buyer
interest despite the ability to spark increased interest in the market through
the morning. Some additional positioning is expected to being seen due to the
end of month and end of quarter. But some additional price shifts are likely to
continue to develop through the last couple hours of trade Tuesday. Cash cattle
trade is silent Tuesday with bids undeveloped. It is likely that trade will be
pushed off until late in the week with bids not likely to be seen until
Wednesday or after with packers ushering in a new month. Asking prices are
generally quiet, but hovering around $167 and higher in the South and $267 to
$268 in the North. Beef cut-outs at midday are higher, $3.16 higher (select)
and up $2.80 per cwt (choice) with light movement of 68 total loads reported
(36 loads of choice cuts, 12 loads of select cuts, 4 loads of trimmings, 16
load of ground beef).
Feeder cattle futures have bounced higher and lower through the morning with
the increased projected acreage in the USDA crop report pushing corn prices
lower, and eroding buyer support in the cattle complex. Nearby contracts are
holding 20 to 40 cent per cwt losses as traders look for additional longer term
direction. The firm support of beef values in the morning report were unable to
draw additional interest back into the market.
Strong end-of-month buying has quickly developed across the lean hog futures
complex with June through August contracts leading the market higher.
Triple-digit gains are holding in these summer contracts, as traders continue
to gain leverage from the bullish hogs and pigs report late last week. Even
though strong gains continue to hold, all contracts have pulled back from
morning highs, which could limit follow through buyer support heading into the
end of the month. Cash prices are unreported due to confidentiality on the
National Direct morning cash hog report. Cash prices are lower on the Iowa
Minnesota Direct morning cash hog report. The weighted average price fell $2.12
per cwt, to $54.47 with a full range of $50.00 to $56.00 per cwt on 129 head
selling. The National Pork Plant Report is reported 192 loads selling as prices
fell $0.38 per cwt. Lean hog index for 3/27 is at $59.96 down 0.43, with a
projected two-day index of $59.70 down 0.26.
Rick Kment can be reached at firstname.lastname@example.org
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