DTN Midday Livestock Comments 05/24 12:09
Feeder Cattle Futures Rally Thursday
Feeder cattle futures have continued to lead the market higher. This is
helping to spark some underlying support through the entire cattle market.
Losses in lean hog trade have backed away from session lows as traders search
for market stability to be seen at the end of the week.
By Rick Kment
Gains have developed through the cattle complex with traders looking for
increased overall buyer support through the last half of the week. The
expectation that trade volume will continue to erode over the next couple of
days may limit price shifts in all markets. Corn prices are lower in light
trade. July corn futures are 2 cents lower. Stock markets are lower in light
trade. The Dow Jones is 129 points lower while Nasdaq is down 10 points.
Narrow losses have developed in spot month June futures as limited activity
has been seen through the morning. The rest of the complex is finding light
buyer support with 10 to 40 cents per cwt higher. The higher price moves in
feeder cattle contracts through the morning is sparking some stability and
firmer market tones through the last half of the week. Cash cattle activity
remains sluggish with bids redeveloping in the North at the same prices as seen
Wednesday. Live bids are seen at $108 per cwt while dressed bids are developing
at $175 per cwt. With asking prices significantly above these levels, trade may
easily be pushed off until sometime Friday. Boxed Beef cut-outs at midday are
mixed, $0.14 higher (select) and down $1.07 per cwt (choice) with moderate
movement of 73 total loads reported (28 loads of choice cuts, 24 loads of
select cuts, 7 loads of trimmings, 13 loads of ground beef).
Triple-digit gains have quickly moved into the feeder cattle complex. There
is growing support in all cattle trade although the sluggish market activity
expected through the last half of the week could add even more volatility to
the complex. May futures are leading the market higher with traders seemingly
trying to catch up with previous gains in other markets. May through September
contracts are holding gains near $1 per cwt at midday, giving an overall
supportive shift to the market.
Narrow gains are seen in nearby lean hog futures trade while very limited
trade activity has developed Thursday morning. This is limiting not only
overall direction in the market but the ability for anyone to really desire to
step into the complex ahead of the long holiday weekend. Nearby contracts are 2
to 15 cents per cwt lower with several deferred contracts still untraded
through the morning. The limited interest may keep most contracts under
pressure through the rest of the session. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price is up $0.27
at $65.06 per cwt with the range from $62.00 to $65.25 on 2,620 head reported
sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog
report. The weighted average price is up $0.08 at $64.67 per cwt with the range
from $62.00 to $65.25 on 505 head reported sold. The National Pork Plant Report
posted 135 loads selling with carcass values falling $0.85 per cwt. Lean hog
index for 5/22 is at $69.03 up 0.34 with a projected two-day index of $69.29,
Rick Kment can be reached at firstname.lastname@example.org
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