Strong midday gains have swept through cattle
trade following the release of the cattle on feed report. Due to the
holiday, the report was released early and during trading hours. This
sparked strong triple-digit gains to develop in nearby live cattle
futures and through the feeder cattle complex. Corn markets are higher
in light trade. December corn futures are 1/2 cent higher. Stock markets
are higher in light trade. The Dow Jones is 124 points higher while
Nasdaq is up 95 points.
LIVE CATTLE:
Strong gains have flooded the live cattle
futures market at midday following the cattle on feed report which was
released early due to the holiday. Having the report released during
trading hours adds some potential volatility to the market where
normally traders would have the weekend to mull over on feed and
placement numbers. Lighter than expected on feed numbers and increased
marketing is helping to spark the limited amount of trade seen in the
market. December futures are holding gains of $1.17 per cwt, moving near
$117 per cwt at midday. Other nearby contracts are holding $1.50 to
$1.65 per cwt gains, while deferred contracts have firmed from 60 to 80
cents per cwt. Cash cattle trade remains undeveloped midday with both
sides likely not showing much interest until after the release of the
cattle on feed report. It is likely that asking prices will firm based
on the report results and futures reaction, which may allow for packers
to be more aggressive then they had expected. Both sides desire to
finish business before the end of the day, but returning Friday is
possible as a last resort. Boxed Beef cut-outs at midday are mixed,
$0.09 higher (select) and down $0.40 per cwt (choice) with light
movement of 86 total loads reported (41 loads of choice cuts, 13 loads
of select cuts, 8 loads of trimmings, 24 loads of ground beef).
FEEDER CATTLE:
Active buying has flooded into the feeder cattle
futures following the early release of the cattle on feed report
Wednesday morning. The sluggish support seen through most of the morning
has been quickly replaced by triple digit gains. January futures are
holding a $2.35 per cwt gain at midday following a lower than expected
cattle placement in the month of October. This could spark some
additional buyer support short term, but is not likely to create
aggressive long term market moves in the complex due to most other
market factors unchanged.
LEAN HOGS:
February lean hog futures continue to lead the
market lower Wednesday morning with prices holding 87 cents per cwt
lower. Although early losses have nearly been cut in half, the overall
lack of support in the complex is based more on limited interest, and
not changing market conditions. Given the sharp rally seen over the last
two weeks, the price pressure over the last couple of days is seen more
as a market correction than the start of a trend. Prices are expected
to shift in a narrow to moderate range over the next few days as active
trade will not be seen until early next week. Cash prices are lower on
the National Direct morning cash hog report. The weighted average price
is $0.52 lower at $50.85 per cwt with the range from $46.00 to $51.70 on
4,118 head reported sold. Cash prices are lower on the Iowa/Minnesota
Direct morning cash hog report. The weighted average price is $1.51
lower at $49.83 per cwt with the range from $46.00 to $51.50 on 1,248
head reported sold. The National Pork Plant Report posted 215 loads
selling on the morning report. Pork carcass values added $1.16 per cwt
at $66.88 per cwt. Lean hog index for 11/19 is $58.23, down 0.28, with a
projected two-day index of $58.02, down 0.21.
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