Strong gains have quickly developed in cattle
futures as triple-digit gains have moved through short term resistance
levels in both live cattle and feeder cattle markets. Lean hog contracts
have turned lower as strong nearby losses quickly pulled back from the
early-month support. 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 34 points lower while Nasdaq is down 2 points.
LIVE CATTLE:
Live cattle futures continue to hold strong
triple digit gains, although buyers have backed away from session highs
seen earlier in the morning. December contracts have broken through
short-term resistance levels set in late August, which is helping to set
the tone for the aggressive buyer support and creating technical
support through the entire cattle complex. This buyer interest may
continue to develop through the end of the session, with potential gains
seen Friday. Cash cattle activity remains slow to develop Thursday
morning with a few bids seen across cattle country at $101 to $102 live
basis and $163 dressed basis. Asking prices are still hovering near $107
and higher live basis and $168 to $170 dressed. At this point it may be
Friday before active trade develops, although the aggressive futures
trade could spark some late-day movement through the market. Beef
cut-outs at midday are slightly higher, $0.09 higher (select) and up
$0.01 per cwt (choice) with light movement of 81 total loads reported
(41 loads of choice cuts, 12 loads of select cuts, 20 loads of
trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are holding strong gains
of $2 to $3 per cwt Thursday morning with aggressive support quickly
moving back into the complex. Even though no new fundamental support is
developing, the ability to move front-month contracts above highs set in
late August has created technical support, and is sparking follow
through buyer interest that may bring additional momentum at the end of
the week.
LEAN HOGS:
Strong early pressure has held through the
morning, although volume has slowed following the initial surge of
seller pressure Thursday morning. Nearby contracts continue to hold
losses of $1.35 to $1.75 per cwt while deferred contracts remain 50 to
80 cents lower in light to moderate pressure. The overall lack of buyer
interest in the last half of the week is not expected to be taken as a
change in market direction at this point, but traders adjusting
positions for now. But there is much more caution being placed on the
upcoming market shifts over the next couple trading sessions, to
determine if recent market support will be able to hold. Cash prices are
lower on the National Direct morning cash hog report. The weighted
average price fell $0.37 at $60.39 per cwt with the range from $55.00 to
$61.00 on 6,084 head reported sold. Cash prices are higher on the
Iowa/Minnesota Direct morning cash hog report. The weighted average
price added $0.23 at $60.89 per cwt with the range from $59.00 to $61.00
on 3,789 head reported sold. The National Pork Plant Report reported
198 loads selling with prices falling $0.94 per cwt. Lean hog index for
9/5 is at $70.33 down $1.03 with a projected two-day index of $69.37,
down $0.96.
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