Strong
gains quickly developed in cattle futures at midday following the surge
in beef values on the morning cutout report. This was driven by
triple-digit gains in nearby live cattle and feeder cattle trade.
Pressure is seen in lean hog futures although light volume is seen,
leaving markets generally weak. Corn prices are lower in light trade.
May corn futures are 4 cents lower. Stock markets are lower in light
trade. The Dow Jones is 28 points lower while Nasdaq is down 20 points.
LIVE CATTLE:
Live
cattle futures have surged higher in light to moderate trade with
strong buyer support moving into the market as April futures posting a
$1.70 gain at midday. This has pushed front month futures near $123 per
cwt, as aggressive support continues to develop in all nearby contracts.
The strong support in beef values in the morning cutout report rocked
the futures trade and was unexpected at this point, given the lack of
development of cash markets early in the week. Follow through buyer
support is likely to be seen through the rest of the morning, but it is
undetermined if there is enough volume in the market to hold the current
gains through closing bell. Cash markets remain undeveloped with bids
still unseen. Asking prices are hard to come by, although it is likely
that prices in the South will be around $128. It is likely that most
trade will be delayed until the second half of the week. Beef cut-outs
at midday are higher, $5.02 higher (select) and up $2.06 per cwt
(choice) with light movement of 61 total loads reported (37 loads of
choice cuts, 13 loads of select cuts, no loads of trimmings, 11 loads of
ground beef).
FEEDER CATTLE:
Following
a wobbly start Tuesday morning, feeder cattle futures have rebounded
nicely and have regained its composure with strong triple digit gains
quickly redeveloping at midday. This aggressive market support has
pushed front month April futures above $137 per cwt with gains in front
month futures at $1.80 per cwt as all nearby contracts are trading $1.80
to $2 per cwt higher at midday. This support has drawn active buyer
activity quickly back into the market seemingly within a matter of
minutes following firm support in beef values and the potential for the
expectation of additional longer term support through the end of the
week. Late-summer premiums continue to be seen in feeder cattle markets,
which are still driving the market-buying activity in the market and
could help to bring additional support to the complex.
LEAN HOGS:
Pressure
in lean hog futures continue to erode Tuesday morning as traders have
continued to back away from the market with April futures breaking
through support of $63 per cwt during the morning with a 62 cent loss.
There is continued pressure in all nearby contracts, led by the lightly
traded May contract with a $1.15 per cwt loss during the morning. Even
though summer contracts are holding prices at $72 to $73 per cwt, the
concern that follow through pressure during the next several weeks will
continue to bring about additional uncertainty through the entire lean
hog futures with very little support from either the cash market or pork
values at this point. Cash prices are lower at midday on the National
Direct morning cash hog report. The weighted average price fell $0.78 at
$56.41 per cwt with the range from $55.88 to $58.50 on 4,180 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct
morning cash hog report. The weighted average price fell $0.46 at $57.51
per cwt with the range from $56.25 to $58.50 on 1,105 head reported
sold. The National Pork Plant Report reported 196 loads selling with
prices adding $0.26 per cwt. Lean hog index for 4/7 is at $65.12 down
$0.61 with a projected two-day index of $65.65 down $0.47.
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