GENERAL COMMENTS: Active trade developed in livestock futures Tuesday Losses developed through the lean hog contracts, with December posting triple-digit losses. Moderate to strong gains were seen in cattle futures with nearby February live cattle leading the rally. Corn futures are higher in light activity. March futures were 2 cents higher. Dow Jones Index is 605 points lower with Nasdaq down 205 points.
CASH MARKETS: Cash cattle interest remains generally undeveloped with a few token starter bids in the North at $183 per cwt Tuesday afternoon. Asking prices are still unable to be pinned down at this point, although more activity should develop Wednesday. According to the closing report, the national hog base is $0.85 lower compared with the prior day settlement ($45.00-$49.87) weighted average $48.68.
LIVE CATTLE: Strong buyer support flooded into nearby live cattle futures Tuesday as traders backed away from Monday's pressure ($0.30 to $1.47 higher). General market uncertainty developed in most markets Tuesday as traders seemed to take a much more cautious and cynical view of the trade talks and "tariff truce" seen over the weekend. More questions arose as to what will or will not be involved in any buying activity from China. This led to additional underlying support in spot month contracts. Beef cut-outs: mixed, $1.67 lower (select, $197.51) and up $0.78 (choice, $213.86) with light to moderate demand and offerings, 165 loads (97 loads of choice cuts, 33 loads of select cuts, 9 load of trimmings, 27 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Extremely limited interest is expected early Wednesday morning as bids are expected to become slightly more prevalent as the day continues. Active trade is not expected until late in the week, which may limit additional market direction Wednesday.
FEEDER CATTLE: Late-day buying developed in feeder cattle futures ($0.10 lower to $0.95 higher). Renewed support in live cattle futures through the second half of the trading session sparked additional interest in deferred feeder cattle contracts. This put more focus on summer and fall 2019 contracts, while it emphasized the increased production costs expected from higher grain markets in nearby contracts. Overall market uncertainty continues as to how beef markets will react to trade talks and global economic conditions. CME cash feeder index for 12/04 is $146.72 down $1.13.
LEAN HOGS: Firm pressure developed Tuesday as traders seem to have retracted positive trade news seen early in the week ($1.15 lower to $0.07 higher). Trader focus has moved away from the positive indications from the trade talks with China, to a more thoughtful and carefully thought out response to the market as traders are met with uncertainty of what any Chinese buying will mean for pork products. Deferred futures saw very limited impact through the session with prices mixed in a narrow range. But the focus on pressure in nearby trade seemed to cut away at previous optimism as the session continued. Pork values firmed with light gains developing following mixed price levels in primal cuts. Pork cutout values gained $0.23 per cwt, moving to $70.88 per cwt. CME cash lean index for 11/30 $56.36 down $0.06. DTN Projected lean index for 12/03 $56.38 up $0.02.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. Limited market direction is expected through the cash hog markets at midweek with bids likely to be very similar to early week trade, steady to $1 per cwt lower. Most bids are expected steady to weak as traders assess outside market direction. Wednesday slaughter numbers are expected to be at 477,000 head with Saturday runs estimated at 220,000 head.
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