DTN Midday Livestock Comments 01/30 11:24
Cattle Futures Bounce Higher at Midday
Midday buyer support has quickly developed. This has replaced light to
moderate losses seen midmorning as traders continue to focus on end of the
month position taking, as well as adjusting for pre-report expectations of the
cattle inventory report. Hog futures remain mostly lower in light trade.
By Rick Kment
DTN Livestock Analyst
Buyer support is firming through the livestock complex at midday with nearby
live cattle and feeder cattle contracts holding moderate to strong support as
the focus shifts to end of the month positioning. There is some support
expected to hold with the cattle inventory report expected to show a 1% drop in
all cattle numbers from year ago levels. Corn prices are lower in light trade.
March corn futures are 5 cents per bushel lower. Stock markets are lower in
light trade. The Dow Jones is 94 points lower while Nasdaq is down 4 points.
Trader direction has been hard to pin down through most of the morning with
prices wandering higher and lower in a moderate range while overall trade
volume appears to be moderate at best. There is likely to be some additional
end of the week and end of the month positioning in both nearby and deferred
contracts as traders look for increased support from outside markets as well as
potential beef demand growth heading into the spring and early summer. Cash
cattle activity remains quiet through the morning with just a few bids
developing in Nebraska at $160 to $160.50 live basis and $252 per cwt dressed.
It is expected that additional trade will need to develop before the end of the
week, especially in the North. This could bring some late day activity which
may be after futures markets close. Asking prices are holding around $161 and
higher in the South and $258 and higher in the North. Beef cut-outs at midday
are lower, $1.31 lower (select) and down $1.20 per cwt (choice) with light
movement of 90 total loads reported (43 loads of choice cuts, 22 loads of
select cuts, nine loads of trimmings, 16 loads of ground beef).
Feeder cattle futures have bounced higher and lower through the morning
following very light trade having a significant influence in price direction
more than price shifts. But at midday, firm buyer support has redeveloped in
nearby contracts raising nearby contracts to triple digit gains. The focus on
end of the month positioning at the end of the session may help to draw
additional support back into the market over the next hour of trade.
Even though lean hog futures have broken away from the aggressive triple
digit losses seen Thursday, the tone of the market remains weak with all but
lightly traded May contracts holding light to moderate losses at midday. The
futures market appears to be focused on eroding into the end of the week with
additional focus on potential cash and meat value moves through early February.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price fell $0.79 per cwt to $66.11 per cwt with the range from
$65.54 to $67.00 per cwt on 3,596 head reported sold. Cash prices are lower on
the Iowa Minnesota Direct morning cash hog report. The weighted average price
fell $1.11 per cwt to $66.45 per cwt with the range from $65.75 to $67.00 per
cwt on 216 head reported sold. The National Pork Plant Report is reported 183
loads selling as prices gaining $0.91 per cwt. Lean hog index for 1/28 is at
$71.73 down 0.41, with a projected two-day index of $71.13 down 0.60.
Rick Kment can be reached at email@example.com
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