Cattle markets are leading the entire livestock
market lower as aggressive late-week pressure quickly flooded into the
market. This may bring increased softness to the entire cattle complex
not only through the end of the week, but could influence trade activity
through the rest of January. Hog futures remain under light pressure
due to pressure in cattle trade. Corn prices are steady to lower in
light trade. March corn futures are 1/4 cent lower Friday. Stock markets
are higher in light trade. The Dow Jones is 82 points higher while
Nasdaq is up 40 points.
LIVE CATTLE:
Live cattle futures are sharply lower, though
prices have pulled back slightly from the session lows set earlier in
the trading day. Nearby contracts are holding losses of $2.50 to $2.70
per cwt, although volume has remained sluggish through the entire Friday
trading session. This is helping to draw additional market activity to
the complex but is likely to keep prices under pressure through the rest
of the session. February futures have now broken below the $120 per
cwt, and a close at these price levels would create some uncertainty in
the market, which could limit additional buying activity early next
week. Cash cattle trade has started to develop Friday morning following
the aggressive downward push in futures trade. This has brought
light-to-moderate trade in all areas with prices generally steady to $1
per cwt lower than last week. Prices seen through the morning are listed
at $122 live basis and $195 per cwt dressed. It is expected that some
additional trade will need to develop before the end of the day. But the
tone of the market is likely to have already been set, and future sales
Friday afternoon may fall in line with current market prices. Boxed
Beef cut-outs at midday are higher, $1.51 higher (select) and up $0.61
per cwt (choice) with light movement of 57 total loads reported (31
loads of choice cuts, 9 loads of select cuts, no loads of trimmings, 17
loads of ground beef).
FEEDER CATTLE:
Follow-through pressure quickly developed in
feeder cattle futures, which led markets to focus on increased market
pressure and the potential to liquidate additional market support.
Nearby feeder cattle futures are holding losses of $2.50 to $3.50 per
cwt, but have backed away from session lows near $4 per cwt lower as
traders seem to be trying to find a moderate middle ground heading into
the weekend. There is likely to be some additional uncertainty early
next week as traders move back into the complex and not only establish
the tone of the market through the rest of January, but focus on
increased fundamental market activity through the winter and spring
months.
LEAN HOGS:
Limited trade activity is seen in lean hog
futures with very little additional direction developing across the
complex. There is likely to be some more markets shifts seen early next
week as the strong pressure in cattle trade and uncertainty about
maintaining recent gains in hog futures continues to draw traders back
to the market. But the light activity will potentially allow prices to
wander into closing bell near the current market price levels. Nearby
futures are holding losses of 10 to 15 cents per cwt, while deferred
futures are seen 20 to 50 cents lower in very light trade. Cash prices
are higher on the National Direct morning cash hog report. The weighted
average price is up $1.49 at $64.15 per cwt with the range from $59.50
to $66.00 on 5,155 head reported sold. Cash prices are higher on the
Iowa/Minnesota Direct morning cash hog report. The weighted average
price is up $1.96 at $65.32 per cwt with the range from $59.50 to $66.00
on 3,160 head reported sold. The National Pork Plant Report posted 180
loads selling with carcass values slipping $0.53 per cwt. Lean hog index
for 1/03 is at $63.63 up $0.88 with a projected two-day index of
$64.22, up $0.59.
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