DTN Midday Livestock Comments 07/18 11:52
Late-Morning Buying Develops in Hog Trade
Triple-digit pressure eroded Thursday morning, allowing for increased buyer
support to redevelop across lean hog futures. Cattle trade remains lower as
limited softness is seen in most contracts.
By Rick Kment
Triple-digit losses in nearby lean hog futures developed early Thursday, but
active losses quickly eroded, sparking increased buyer activity in most
contracts. Corn futures are lower in light trade. September corn futures are 7
cents lower. Stock markets are lower in light trade. Dow Jones is 83 points
lower with NASDAQ down 27 points.
Live cattle futures have shifts in a narrow range in either direction
through the morning. This is limiting overall trade volume Thursday morning
with very limited long-term direction seen late in the week. Even though firm
underlying support is still holding across the complex, the lack of consistency
through the market may add to price variability over the upcoming days and
weeks. Cash cattle markets remain quiet Thursday with a few bids restated in
the North. Live bids of $113 are developing with dressed bids of $182. At this
point, asking prices are not budging from $114 live and $186 dressed, which may
delay any additional activity until Friday. Additional cash trade could be
pushed off until after the cattle reports Friday afternoon. Boxed Beef cut-outs
at midday are higher, $0.48 higher (select) and up $0.62 per cwt (choice) with
light movement of 66 total loads reported (27 loads of choice cuts, 12 loads of
select cuts, 9 loads of trimmings, 17 loads of ground beef).
Early gains have been offset by light to moderate pressure seen through the
entire feeder cattle complex midday. Traders are starting to focus on
adjustments ahead of the cattle on feed report released late Friday afternoon.
This will likely have the greatest impact of the two reports, although at this
point there is uncertainty of direction. Even though estimated cattle
placements are lower, the wide range of estimates may diminish the confidence
that traders put in these estimates before the report is released.
Wide market shifts developed Thursday morning as traders try to bring
stability back into the complex midday following aggressive market swings over
the last two session. Triple-digit losses developed through most of the
morning, although renewed focus on firm cash market support and potential
demand strength is offsetting early losses, moving prices in mixed activity
late morning. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price is up $0.62 at $72.15 per cwt with the range
from $58 to $76 on 11,567 head reported sold. Pork values surged higher
following an $18.64 per cwt rally in belly cuts. Pork cutouts gained $1.89 per
cwt at $78.37 per cwt with 166 loads traded. Lean hog index for 7/16 is $70.79,
up 0.17, with a projected two-day index is $71.52, up 0.73.
Rick Kment can be reached at firstname.lastname@example.org
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