GENERAL COMMENTS: Strong buyer support has moved into the cattle complex with triple-digit gains quickly developing Monday. Early support in feeder cattle trade jumpstarted buyer interest, which quickly led to moderate-to-strong buying through the entire complex. Cash cattle activity remains at a standstill with new showlist distribution the extent of activity through the week. Overall, showlists appear to be mixed, increasing in Texas, while steady to smaller in all other areas. Hog futures are mixed in a narrow range as traders are processing the strong buyer support that developed last week. According to the closing report, the national hog base is $0.67 higher ($45.50-$50.50 per cwt, weighted average $48.87 per cwt). Corn futures are higher in light activity with March futures up 3/4 cent. The Dow Jones Index is 18 points higher with the Nasdaq up 30 points.
LIVE CATTLE: Renewed support quickly moved into the cattle complex Monday, allowing some much needed-relief following aggressive pressure the first few trading days of 2019. Futures closed $0.57 to $1.27 higher. Increased buyer support developed as triple-digit gains flooded into feeder cattle markets. The higher markets early in the week could curb concerns of additional follow-through liquidation. Beef cut-outs: mixed, $0.55 higher (select, $208.21) to down $0.23 (choice, $214.28) with moderate demand and heavy offerings, 128 loads (56 loads of choice cuts, 18 loads of select cuts, 30 load of trimmings, 24 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Cash market activity is still expected to remain quiet Tuesday with bids and asking prices not expected to be seen until midweek or later.
FEEDER CATTLE: Strong early support set the pace for renewed buyer activity moving into all cattle trade. Futures closed 87 cents to $1.10 higher. Sharp gains pushed prices to a triple-digit rally in the early minutes of trade. This underlying support has helped to calm some of the fears concerning aggressive market pressure and liquidation through January. Although the pullback last week is still being closely watched and traders are extremely cautious, the early week support may help to bring additional longer-term buying interest. CME cash feeder index for 1/3 is $145.60, up $0.46.
LEAN HOGS: Trade was mixed Monday ($0.45 lower to $0.25 higher) as traders apply the brakes on aggressive buying. Initial support in nearby contracts was unable to hold following additional buying moving back into the complex. This helped to spark some underlying buyer interest in deferred trade. Nearby contracts eroded through the day, with most commercial traders moving to the cattle complex following the turnaround in prices Monday. This left nearby contacts unsupported, but still far from showing a weaker market tone given the strength seen over the last two weeks. Pork values firmed despite pressure in several cutout values. Pork cutout values added $0.86 per cwt, moving to $70.56 per cwt. CME cash lean index for 1/03: $53.63, up $0.38. DTN Projected Lean Index for 1/04: $54.50, down $0.87.
TUESDAY'S CASH HOG CALL: Steady to $1.50 higher. Firm buyer support is expected early Tuesday with packers focusing on still-strong margins as they continue to maximize production rates. Tuesday slaughter numbers are expected to be at 477,000 head.
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