DTN Midday Livestock Comments 11/26 12:05
Further Pressure Develops in Cattle Trade
Pressure has quickly developed in live cattle and feeder cattle futures at
midday. Early support in the complex quickly eroded as traders focus on slowing
trade volume and development of steady cash trade in several areas. Lean hog
futures moved higher at midday.
By Rick Kment
A direction shift has been seen through the livestock market at midday with
moderate buyer support trickling back into the lean hog futures market. This
has helped to draw additional support back into the complex. Cattle trade has
turned weaker with strong losses seen in both the live cattle and feeder cattle
complex. Corn prices are higher in light trade. December corn futures are 3
cents per bushel higher. Stock markets are mixed in light trade. The Dow Jones
is 11 points lower while Nasdaq is up 18 points.
It appears that cash cattle trade will likely get done before the
Thanksgiving break. This has quickly limited any early buyer support in the
complex, although cash markets are expected to remain near steady with last
week levels. Strong pressure is seen in February live cattle futures with
losses of $1.17 per cwt. The additional weakness in feeder cattle futures is
adding to the overall market concerns. Cash cattle trade is starting to develop
but having a hard time getting significant business done at this point. Trade
in the South may be nearing completion with prices at $173 per cwt, which is
fully steady with last week.
Bids of $267 are seen in the north, but so far no activity has been
confirmed as far as sales. It is likely that feeders will move cattle with
prices steady to firm from last week. Asking prices on cattle still left to be
sold are around $175 in the South and $272 to $274 in the North. Beef cut-outs
at midday are higher, $0.18 higher (select) and up $0.59 per cwt (choice) with
light movement of 143 total loads reported (49 loads of choice cuts, 21 loads
of select cuts, 29 loads of trimmings, 44 loads of ground beef).
Early support in the feeder cattle futures was unable to hold through
morning trade as the focus once again turned to uncertainty about growth in
demand and higher than expected short-term supplies over the near future.
Although limited trade is seen through the entire complex, pressure in deferred
contracts has quickly eroded any nearby support.
Futures prices have strengthened through the morning as light to moderate
buyer support is slowly trickling into nearby contracts. December contracts are
holding just 10 cent per cwt gains, while firmer support is seen in spring and
summer contracts based on the potential of demand growth. There remains light
trade through the complex which could keep prices extremely limited. Cash
prices are lower on the National Direct morning cash hog report. The weighted
average price fell $1.43 per cwt to $84.54 per cwt with the range from $77.00
to $86.75 per cwt on 3,220 head reported sold. Cash prices are lower on the
Iowa Minnesota Direct morning cash hog report. The weighted average price fell
$1.05 per cwt to $86.23 per cwt with the range from $80.00 to $86.75 per cwt on
500 head reported sold. The National Pork Plant Report is reported 223 loads
selling as prices falling $0.52 per cwt. Lean hog index for 11/21 is at $88.78
down $0.08, with a projected two-day index of $88.74 down 0.04.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
Your local weather forecast from DTN can be sent to your email every morning free through DTN Snapshot