GENERAL COMMENTS
Cash cattle interest has been undeveloped Tuesday with traders unable to bring additional bids or asking prices to the table so far this week. This could easily delay trade until late in the week even though packers appear to be short bought. According to the closing report, the national hog base is $1.15 per cwt lower with an average price of $67.76 per cwt (trading range: $61.00-to-$69.00). The corn futures are lower in light activity. March futures were 1/4 cent lower Tuesday. The Dow Jones Index is 39 points higher with the Nasdaq up 31 points.
LIVE CATTLE
Despite price shifts early in the session, markets remained sluggish and in a narrowly mixed range heading into closing bell ($0.30 lower to $0.27 higher). Little to no longer-term market shifts are seen in the complex with traders looking for the ability to add stability to the market following Monday's market moves. However, underlying pressure in several outside markets and pressure through the livestock trade has quickly limited any commercial buying interest from moving back into the trade complex. Beef cut-outs: lower, $0.84 lower (select, $203.13) and down $0.88 (choice, $207.36) with light to moderate demand and offerings (74 loads of choice cuts, 20 loads of select cuts, 6 load of trimmings, 27 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady. Bids and asking prices are generally undeveloped late Tuesday afternoon, which will leave little to no activity developing early Wednesday. The expectation is that trade may be delayed until late in the week.
FEEDER CATTLE:
Trade remained mixed in a narrow to moderate trading range ($0.40-lower-to-$0.22 higher). The overall lack of direction in the complex continues to bring increased activity to the market and could spark some increased choppy moves through the rest of the week with prices hovering in a narrow to moderate range. There will likely be some additional underlying support developing in deferred contracts, although the tone of the market will likely remain weak given the volatility over the last several days. CME cash feeder index for 2/12 is $147.57 down $0.06.
LEAN HOGS:
Hog futures traded mixed to mostly lower, with all but front month contracts posting losses (1.10 lower-to-$0.27 higher). The inability to bring buyers back into the market over the Tuesday session is creating some additional longer-term concerns in all markets. This may add even more weakness to the complex and could spark increased liquidation in all markets. Nearby futures posted the most aggressive losses with April contracts holding a $1.10 per cwt loss. Carcass values firmed as moderate to strong gains redeveloped in most pork primal cuts. The aggressive pressure last week has left the market oversold, allowing for buyers to quickly move into the market with some additional support likely to be seen through the near future. Pork cut-out: $77.50 up $0.79. CME cash lean index for 2/9 $74.72 down $0.66. DTN Projected lean index for 2/12 $74.30 down $0.42.
WEDNESDAY'S CASH HOG CALL:
Steady to $2 lower. Continued pressure is seen in cash hog prices with early market bids expected to remain under pressure once again. Even though prices have eroded in a moderate range, the shifts seen in the complex continue to drive additional weakness into the market and could add even more price pressure during the end of the week. Packer activity is expected to move 465,000 head Wednesday with an estimated 75,000 head on Saturday
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