Cattle futures have quickly moved to limit gains Wednesday morning after posting extremely sluggish trade activity early in the session. The increased market interest quickly sparked market support in both live cattle and feeder cattle trade. Lean hog futures remain lightly trade in a narrow to moderate range. Corn prices are lower in light trade. July corn futures are 8 cents lower. Stock markets are higher in light trade. The Dow Jones is 110 points higher while Nasdaq is up 56 points.
LIVE CATTLE:
Limit gains have quickly developed in August futures following the surge higher in feeder cattle markets early Wednesday. This rapid move from narrowly mixed trade activity seen earlier in the session has allowed for additional buyer support to move back into the complex. Sustained strong support in futures trade may continue to be seen through the rest of the week although there may be some additional volatility due to the limit gains seen Wednesday morning. Cash cattle markets are starting to show interest early in the morning with scattered bids starting to develop through the morning. Early asking prices are around $120 to $122 in the South and $190 to $192, while the bids seen midweek are at $115 live basis and $186 to $187 dressed basis. Activity on the Fed Cattle Exchange Auction listed a total of 2,655 head, 1,907 head listed as sold, 525 head listed as PO, and 233 head listed as unsold. The individual state breakdown looks like this: KS 266 head total, 266 head sold with a price range of $117.75-$118.00; NE 1,703 head total, 1,240 head sold with a price range of $117.25-$118.75, 240 head listed as PO ($117.75), and 223 head listed as unsold; TX 471 head total with a price range of $117.00-$118.00, 150 head listed as PO ($117.75); CO 135 head total, all of which were listed as PO ($117.00); IA 80 head total, all 80 head listed as sold at $118.00. The weighted averages are as listed: 1-9 day delivery 667 head $117.80; 1-17 day delivery 580 head, $118.45; 17-30 day delivery 660 head, $117.34. Beef cut-outs at midday are lower, $2.24 lower (select) and down $2.17 per cwt (choice) with active movement of 123 total loads reported (59 loads of choice cuts, 31 loads of select cuts, 18 load of trimmings, 15 loads of ground beef).
Feeder Cattle:
Feeder cattle futures have quickly surged to limit gains with August and September contracts quickly moving from narrow gains during early trade to a $4.50 per cwt rally following renewed buyer support in all cattle markets. There is still uncertainty as to just how much support will be seen in market fundamentals through the first couple weeks of July. The ability to hold aggressive limit gains will likely help to create additional support later in the week from additional traders.
LEAN HOGS:
Moderate buyer support has slowly stepped back into the lean hog futures complex with 40 to 60 cent gains holding through the complex based on firm support in pork values during the morning, although trade remains focused on eroding cash price levels on morning reports. The aggressive support which has quickly developed in cattle trade is helping to draw support back into the lean hog complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.42 at $85.42 per cwt with the range from $82.00 to $87.50 on 3,700 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 219 loads selling with prices adding $1.58 per cwt. Lean hog index for 7/10 is at $92.59 up $0.13 with a projected two-day index of $92.75, up $0.16.
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