DTN Midday Livestock Comments 09/02 12:25
Cattle Futures Bounce Higher at Midday
Aggressive pressure seen early in the complex through cattle markets have
evaporated at midday. Lean hog futures continue to hold strong triple-digit
By Rick Kment
Strong gains continue to hold in lean hog futures. The focus on drawing
buyers back to the live cattle and feeder cattle markets could help to draw
additional trade activity into the cattle complex, although the underlying
softer tone of the market may not be able to be shaken before markets close.
Corn prices are lower in light trade. September corn futures are 4 cents per
bushel lower. Stock markets are higher in light trade. The Dow Jones is 171
points higher while Nasdaq is up 52 points.
Live cattle futures have bounced higher and lower through the morning with
wide price swings limiting trade activity through the rest of the complex.
Mixed trade is expected to hold through late morning, but this may not be able
to set the tone for the weakness seen early in the session. Traders are looking
for additional direction from outside markets. Cash cattle markets are quiet
Wednesday morning with bids developing at $142 to $144 in the South and $222 to
$225 in the North. At this point there is very little interest in generating
any activity. But it is expected that both sides will try to wrap things up by
the end of the day Thursday in order to spark additional activity ahead of the
holiday. Asking prices are not fully developed, but around $148 to $150 per cwt
in the South and $232 and higher in the North. Beef cut-outs at midday are
mixed, $0.10 higher (select) and down $0.25 per cwt (choice) with moderate
movement of 103 total loads reported (50 loads of choice cuts, 20 loads of
select cuts, 16 loads of trimmings, 22 loads of ground beef).
Feeder cattle futures have bounced higher at midday after posting sharp
losses earlier in the session. The reversal in buyer interest may not be able
to hold, but it does help to distance current prices from setting new lows,
which was a concern through most of the morning. Very little concrete support
is able to be seen in the market, which could allow prices to swing in a wide
range through the rest of the session.
Strong triple digit gains continue to hold in nearby contracts with traders
focusing on the ability for the recent market pressure seen in hog futures to
create some follow through momentum as traders look for even more support in
the near future. Supporting pork values is likely to help maintain buyer
interest through the near future, and potentially help draw additional activity
following the Labor Day holiday. Cash prices are lower on the National Direct
morning cash hog report. The weighted average price fell $1.33 per cwt to
$70.94 per cwt with the range from $64.00 to $70.72 per cwt on 5,277 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $1.10 per cwt to $71.70 per cwt
with the range from $64.00 to $70.72 per cwt on 1,875 head reported sold. The
National Pork Plant Report reported 222 loads selling with prices adding $0.58
per cwt. Lean hog index for 8/31 is at $77.23 down 0.47, with a projected
two-day index of $76.88, down 0.35.
Rick Kment can be reached at email@example.com
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