Moderate pressure has developed through livestock futures as cattle markets have shifted lower late morning. The move is being led by live cattle futures, focusing on the pullback in feeder cattle trade. Corn markets are lower in light to moderate trade. December corn futures are 1/4 cent lower. Stock markets are lower in light trade. The Dow Jones is 163 points lower while Nasdaq is down 50 points.
LIVE CATTLE:
Firm pressure in feeder cattle futures is adding to the overall lack of support in live cattle markets. Front month December futures are holding an 82 cent per cwt loss, while the rest of the complex remains contained in a narrowly mixed range. Prices continue to test short term lows, in several nearby contracts, but the wide sideways trend seen in long term activity is expected to continue and allow prices to shift higher and lower within a moderate pattern over the next several weeks. Cash cattle interest is slowly trickling into the market with a few dressed bids in the North from $175 to $176 per cwt. Asking prices remain extremely hard to pin down with not enough seen to establish a sense of feeders interests. It is likely that both sides will become more vocal through the end of the day, although at this point it is likely that trade will not develop until late in the week. Boxed Beef cut-outs at midday are lower, $0.63 lower (select) and down $0.48 per cwt (choice) with moderate movement of 88 total loads reported (56 loads of choice cuts, 16 loads of select cuts, no loads of trimmings, 15 loads of ground beef).
FEEDER CATTLE:
Moderate losses are seen at midday following back and forth market shifts through the morning. Nearby contracts are showing a 2 cent loss in the lightly traded November contract, although prices through the rest of the complex are trading 25 to 70 cents lower. Most of the morning pressure has little to do with the direction of markets or fundamental shifts, but more focused on market corrections following the aggressive and potentially overstated gains seen in late trade Tuesday. Light activity is expected to be seen through the rest of the session, with limited activity seen across the complex.
LEAN HOGS:
Limited activity is seen through the entire lean hog futures complex with nearby gains seen 10 to 45 cents per cwt higher. The overall lack of aggressive follow through support is not surprised given the back and forth market shifts through the entire week. Deferred contracts are holding light to moderate losses with limited additional direction seen across the complex. December through April contracts, which are posting gains, are the same market contracts that developed late day support Tuesday, indicating follow through commercial support in nearby contracts as traders focus on the ability to hold cash markets higher in morning reports. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.31 higher at $51.86 per cwt with the range from $46.00 to $52.44 on 5,771 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is $1.56 higher at $51.70 per cwt with the range from $48.00 to $52.00 on 1,354 head reported sold. The National Pork Plant Report posted 223 loads selling on the morning report. Pork carcass values fell $1.00 per cwt at $69.69 per cwt. Lean hog index for 11/12 is $61.20, down 0.67, with a projected two-day index of $60.47, down 0.73.
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