GENERAL COMMENTS: Firm pressure in most livestock trade seemed to create very little market direction Monday. Feeder cattle futures posted strong losses in front-month contracts, while live cattle trade closed mixed with spot contracts setting new contract highs. Lean hog futures eroded on follow-through pressure. Limited volume may allow for additional moderate to wide shifts through the upcoming trading days. Cash markets are undeveloped with showlist distribution and inventory taking the main order of business Monday. Showlists for the week appear mixed with gains in Kansas offset by lower offerings in Texas and Nebraska. Closing cash hog prices are unavailable at this time due to packer submission delays. Corn futures are higher in light activity. March futures were 1/4 cent higher. Dow Jones Index is 92 points lower with Nasdaq down 63 points.
LIVE CATTLE: Mixed trade developed Monday despite the generally weaker tone across the livestock complex. Futures closed $0.42 lower to $0.45 higher. Firm buyer support continues to move into nearby live cattle trade with February and April futures setting contract highs once again. The rest of the complex remained under pressure, although losses were minimized through the last half of the trading session. Despite sharp nearby pressure in feeder cattle trade and uncertainty in beef values commercial trade support developed in February and April contracts with traders still focusing on firming spring and summer demand. Beef cut-outs: lower, down $0.81 (select, $205.46) to down $0.44 (choice, $212.02) with moderate demand and offerings, 138 loads (76 loads of choice cuts, 21 loads of select cuts, 21 load of trimmings, 20 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Little to no direction is expected Tuesday with asking prices and bids expected to remain unavailable until later in the week. Active trade may be pushed off until the end of the week once again.
FEEDER CATTLE: Strong losses led selling pressure through the entire cattle complex Monday, with futures closing $0.40 to $1.27 lower. Front-month January feeder cattle futures quickly tumbled lower during the early minutes of trade with prices falling $1.27 per cwt to $144.85 per cwt, as nearby contracts have regained a narrow trading range. Expected strong cattle placements through the upcoming months, as well as pressure in deferred live cattle trade, has added to the market softness. Outside of front-month contracts posting triple-digit losses, limited trade kept the rest of the complex confined to a narrow trading range with prices 50 to 60 cent lower in most contract months. The overall lack of support is still not enough to spark widespread pressure. CME cash feeder index for 1/11 is $144.65, down $0.81.
LEAN HOGS: Firm pressure quickly developed in all lean hog trade. Even though futures have pulled back from recent highs, markets still remain well above support levels. Futures closed $0.50 to $1.40 lower. Initially, traders focused on backing away from the strong market bounce last week. Nearby contracts still remain well above support levels, which is sparking some market stability through the entire complex. Summer contracts on the other hand are steadily gaining additional pressure. This move lower in futures trade has more to do with overall uncertainty about sustaining price premiums and commanding strong pork demand through the last half of the summer, than any short-term commercial interest. July contracts continue to hold a $6-per-cwt premium over spot February contracts, but the recent trend has started to quickly erode summer market premiums based on overall economic and demand uncertainty. Pork continues to shift higher despite a sharp $5.25-per-cwt loss in rip cuts. Pork cutout values gained $0.23 per cwt, moving to $71.19 per cwt. CME cash lean index for 1/10 $56.69 up $0.70. DTN Projected lean index for 1/11 is unavailable.
TUESDAY'S CASH HOG CALL: Steady to $1 lower. Light pressure is expected in cash hog trade early Tuesday with the focus on recent market softness in futures and pork values. Most bids are expected to remain steady to weak with limited price movement. Tuesday plant runs are expected at 475,000 head.
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