Strong pressure has redeveloped in cattle trade
through the morning Wednesday. This has quickly replaced the strong
market surge seen early in the session and is also eroding support seen
early in the week. Mixed lean hog futures trade is limiting additional
market direction. Corn prices are higher in light trade. March corn
futures are 1 cent per bushel higher. Stock markets are higher in light
trade. The Dow Jones is 131 points higher, while Nasdaq is up 22 points.
LIVE CATTLE:
Moderate selling pressure has developed across
all live cattle trade midday Wednesday. This overall lack of support is
not only creating some concerns that traders are looking for
follow-through stability after the previous market gains but also may be
now trying to adjust to renewed liquidation. Trade remains sluggish at
this point, although there is likely to be some additional pressure
developing through the end of the session. Cash cattle markets are
becoming more active midday Wednesday with live bids seen in all areas
at $114 to $115 per cwt. This is steady to $1 per cwt higher than the
few token bids that developed Tuesday, but still well under asking
prices of $119 to $120 per cwt live basis. Activity for dressed trade
remains undeveloped with bids and asking prices still hard to find at
this point in the week. The Fed Cattle Exchange Auction today listed a
total of 704 head, with 75 actually sold, 246 head listed as unsold, and
383 head listed as PO (Passed Offer). The state-by-state breakdown
looks like this: KS 318 total head, with 75 head sold at $116.00, 59
head unsold, 184 head listed as PO ($116.00); NE 121 total head, with
zero head sold, 121 head unsold, and zero head listed as PO; TX 265
total head, with zero head sold, 66 head unsold, and 199 head listed as
PO ($116.00); CO -- no cattle reported; IA -- no cattle reported; other
states -- no cattle reported. The delivery date/weighted average
breakdown is as listed: 1-9 day delivery: 704 head total, 75 head sold,
with a weighted average price of $116.00; 1-17 day delivery -- no cattle
reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery
-- no cattle reported. Beef cut-outs at midday are lower, $0.11 lower
(select) and down $1.05 per cwt (choice) with active movement of 105
total loads reported (67 loads of choice cuts, 18 loads of select cuts,
11 loads of trimmings, 10 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have posted moderate to
firm losses at midday after giving back all of the early market support.
The overall lack of direction in the complex and concern that increased
pressure may quickly sweep back into the market through the end of the
week has pulled back from the early week gains. Feeder cattle futures
are holding losses of 40 cents to $1.20 per cwt as trade activity
remains sluggish, but any sense of widespread support has evaporated at
this point.
LEAN HOGS:
Narrow trade ranges have continued to develop in
lean hog futures following the initial morning market shift. This has
left prices generally unsupported, and traders are looking for increased
market direction through the morning with prices hovering on either
side of unchanged. The sharp pressure in pork values and weakness in
cash trade may add pressure to the complex over the near future. Cash
prices are lower on the National Direct morning cash hog report. The
weighted average price is down $0.54 at $57.58 per cwt with the range
from $50.00 to $59.20 on 4,418 head reported sold. Cash prices are lower
on the Iowa/Minnesota Direct morning cash hog report. The weighted
average price fell $1.01 at $56.65 per cwt with the range from $50.00 to
$58.00 on 1,848 head reported sold. The National Pork Plant Report
posted 307 loads selling with carcass values falling $4.59 per cwt. Lean
hog index for 12/11 is at $64.97 down $0.20 with a projected two-day
index of $64.86, down $0.11.
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