DTN Midday Livestock Comments 04/15 11:53
Hog Prices Tumble Lower
Aggressive gains seen early Tuesday morning have quickly evaporated,
allowing most nearby contracts to trade lower at midday. The swift reversal in
the market has also limited buyer support through the cattle complex Tuesday
By Rick Kment
Sharp gains which developed early in lean hog futures have quickly
evaporated. The lack of support under the current buying surge allowed strong
pressure back into the market. May lean hog futures are trading nearly $1 per
cwt lower, with most other contracts holding moderate to strong losses. Cattle
futures remain under pressure with focus on beef values. Corn futures are
higher at midday. May corn futures are 3 cents per bushel higher. Stock markets
are lower in light trade. The Dow Jones is 69 points lower while Nasdaq is down
Losses have expanded through morning trade with the focus on recent gains in
the grain markets as well as abrupt market shift in the lean hog complex
through the morning Tuesday. April futures are trading 57 cents per cwt lower,
with all other nearby contracts holding 65 to 85 cent per cwt losses at midday.
It appears that markets are willing to coast into closing bell, as they look
for additional longer term market direction. Cash cattle markets remain
undeveloped with bids still undeveloped. The few asking prices seen so far this
week are holding at $149 to $150 in the South and $243 and higher in the North.
But both sides appear to be firmly expecting to move prices in their respective
direction at this point of the week. Beef cut-outs at midday are higher, $2.03
per cwt higher (select) and up $0.95 per cwt (choice) with moderate movement of
88 total loads reported (42 loads of choice cuts, 28 loads of select cuts,
three loads of trimmings, 13 loads of ground beef).
Strong losses have developed through feeder cattle futures following the
lack of support in live cattle futures and aggressive gains in grain prices.
Trade volume remains extremely light across the complex, with losses of 80 to
95 cents seen in several nearby contracts. The tight trading range seen between
April and November contracts could create some uncertainty about breaking out
of the current market range over the spring and summer months.
Lean hog futures have posted an aggressive reversal through morning trade,
although the current trading range is likely to do very little to the market
from a technical standpoint as prices continue to chop around in a moderate but
current trading range. Triple-digit gains have quickly been replaced by
moderate to strong losses in nearby contracts as traders focus on weaker pork
prices in the morning report. It is uncertain just how much support will
redevelop before closing bell given the midday market volatility and light to
moderate trade. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price fell $1.91 per cwt to $116.00 per cwt with
the range from $105.00 to $116.05 per cwt on 3,561 head reported sold. Cash
prices are unreported due to confidentiality on the Iowa Minnesota Direct
morning cash hog report. The National Pork Plant Report reported 161 loads with
prices slipping $1.66 per cwt. Lean hog index for 4/11 is at $125.55 down 1.20,
with a projected two-day index of $124.12 down 1.43.
Rick Kment can be reached at firstname.lastname@example.org
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