Firm pressure has continued to develop through the livestock market with firm pressure seen in both live cattle and lean hog futures trade. This lack of support in nearby and deferred futures trade has focused on a combination of technical and fundamental pressure. Corn prices are lower in light trade. September corn futures are 2 cents lower. Stock markets are lower in light trade. The Dow Jones is 51 points lower while Nasdaq is down 17 points.
LIVE CATTLE:
Live cattle futures are holding moderate to firm pressure at midday with traders are looking for increased softness seen in the October contracts. The lack of support in the complex continues to be based on underlying pressure in beef values as well as the concerns that long term selling pressure may continue surrounding supply pressure if bearish cattle on feed report numbers are seen at the end of the week. Cash cattle activity remains slow to develop Wednesday with feedlot bids seen at $106 to $107 live basis and $170 to $173 dressed basis. There still continues to be a wide gap between asking prices and bids, which may limit active trade from developing until later in the week. The Fed Cattle Exchange Auction report today listed a total of 1,067 head, with 0 actually sold, 731 head listed as unsold, and 336 listed as PO. The state by state breakdown looks like this: KS 271 total head, with 0 head sold, 141 head unsold, 130 head listed as PO ($107.25); NE no cattle offered this week; TX 427 total head, with 0 head sold, 221 head unsold, and 206 head listed as PO ($107.00); CO 176 total head, with 0 head sold, 176 head unsold, and 0 head listed as PO; IA 193 total head, with 0 head sold, 193 head unsold, and 0, head listed as PO; other states no cattle offered this week. Beef cut-outs at midday are lower, $1.45 lower (select) and down $0.12 per cwt (choice) with moderate movement of 96 total loads reported (59 loads of choice cuts, 26 loads of select cuts, no loads of trimmings, 11 loads of ground beef).
FEEDER CATTLE:
Narrow losses in nearby feeder cattle futures are holding at midday in feeder cattle futures after mixed price levels have held through much of the morning. The lack of active trade activity in the feeder cattle market seems to be focusing on the potential for market stability midweek and traders looking for additional direction. Strong pressure in deferred futures is still creating some underlying concern for the entire cattle market as well as overall feeder cattle market although traders look for increased direction later in the week from the cattle on feed report that will be seen Friday afternoon.
LEAN HOGS:
Strong pressure continues to be seen across lean hog futures trade with nearby contracts holding losses nearing $1 per cwt at midday. The overall lack of support in the complex is focusing not only on the technical pressure across the market, but also the weakness in the cash trade. Even though prices have held lower prices, the stability through the morning is showing very little activity in the complex, indicating that actual trade in the market may be limited, and could keep volume sluggish midweek. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.60 at $68.99 per cwt with the range from $66.00 to $71.00 on 3,608 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.94 at $69.92 per cwt with the range from $66.00 to $71.00 on 630 head reported sold. The National Pork Plant Report reported 204 loads selling with prices falling $0.51 per cwt. Lean hog index for 8/21 is at $81.53 down $0.82 with a projected two-day index of $82.49, down $1.04.
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