DTN Midday Livestock Comments 12/12 12:04
Feeder Cattle Futures Surge Higher
Strong triple-digit gains in feeder cattle futures continue to spark
additional buyer interest through the rest of the livestock complex. There is
an absence of seller interest in the market following the strong liquidation
seen earlier in the week.
By Rick Kment
Livestock futures have turned higher Thursday as the active pressure seen
early in the week appears to have run out of gas. Triple-digit gains in feeder
cattle contracts are seemingly helping to create increased support through
other livestock markets. Corn futures are lower at midday. March corn futures
are 10 cents per bushel lower. Stock markets are lower in light trade. The Dow
Jones is 108 points lower while Nasdaq is down 40 points.
Moderate gains have developed in early trade, and been able to hold through
the morning. The focus in live cattle futures is expected to be more based on
position covering and renewed commercial buying interest than any moves in beef
values. Gains of 40 to 50 cents per cwt are seen in nearby contract months,
with slightly lighter support freely developing through the rest of the
complex. Cash cattle markets remain quiet with light to moderate bid activity
developing through the morning. Bids are seen at $129 to $130 in the South and
$206 in the North. This is still not likely to gain much attention at this
point, and could delay trade until Friday. Asking prices remain at $134 to $135
in the South and $210 and higher in the North. Beef cut-outs at midday are
mixed, $0.57 per cwt higher (select) and down $2.11 per cwt (choice) with
moderate movement of 108 total loads reported (38 loads of choice cuts, 39
loads of select cuts, 13 loads of trimmings, 18 loads of ground beef).
Aggressive triple-digit gains have quickly developed through morning trade
and the sharp gains appear to be holding well during the rest of the session.
Although there may not be a lot of additional buyer support, the lack of
selling pressure late in the week seems to be the main focus of the market.
Weakness in grain prices is keeping most traders interested in feeder cattle
Firmness through the rest of the livestock market has turned the sharp
losses seen earlier in the week into moderate gains. It is uncertain just how
much volume is available to step back into the market at this point, but active
short covering appears to be the main focus of morning trade. Gains of 35 to 75
cents per cwt are holding at midday, which may help to stabilize the market at
the end of the week. Cash prices are higher on the National Direct morning cash
hog report. The weighted average price gained $0.78 per cwt to $78.70 per cwt
with the range from $76.00 to $80.00 per cwt on 7,525 head reported sold. Cash
prices are higher on the Iowa Minnesota Direct morning cash hog report. The
weighted average price gained $1.08 per cwt to $79.34 per cwt with the range
from $76.00 to $80.00 per cwt on 4,630 head reported sold. The National Pork
Plant Report reported 177 loads with prices slipping $0.98 per cwt. Lean hog
index for 12/10 is at 81.35 down 0.34, with a projected two-day index of $81.15
Rick Kment can be reached at email@example.com
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