GENERAL COMMENTS: Lean hog futures were under pressure again Friday with nearby contracts nearing long-term support levels. Cattle trade improved with triple-digit gains seen in nearby contracts. From Friday to Friday, livestock futures scored the following changes: Feb LC up $1.93, Apr LC up $1.65, Mar FC up $1.57, Apr FC up $1.90, Feb LH off $1.30 and Apr LH off $1.70. Cash cattle trade had started to develop late afternoon Friday with light trade at $200 per cwt dressed basis. This is generally $2 per cwt higher than last week's prices. Activity in the South is still undeveloped, but feeders are holding onto live asking prices of $126 to $127 per cwt. The National Daily Direct afternoon hog report was $0.13 lower ($45-$50, weighted average $49.43) on 6,623 head sold. Corn futures were lower in light activity with the March contract down 2 1/4 cents. The Dow Jones Index was 151 points lower with Nasdaq down 7 points.
LIVE CATTLE: Live cattle futures were $0.30 to $1.10 higher. Strong end-of-the-week buyer support moved into the market Friday as traders anticipated higher cash cattle trade with feedlot managers holding higher asking prices. Late-day pressure in the grains trade also helped to spark some additional buying. Nearby contracts moved within striking distance of contract highs once again. Moves above current contract highs next week could spark increased technical support in all contracts. Beef cut-outs: lower, down $0.36 (select, $211.17) and down $1.36 (choice, $215.35) with light demand and offerings, 83 loads (45 loads of choice cuts, 13 loads of select cuts, 7 load of trimmings, 17 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. Activity early next week will be limited to showlist distribution and inventory-taking with both sides assessing activity done late Friday.
FEEDER CATTLE: Feeder cattle futures were $0.50 to $1.02 higher as strong support moved back into the market following pressure in the corn market. Corn prices were unable to hold early support following the release of the USDA Crop Production report Friday. The drop in corn futures has traders anticipating lower production costs through the summer. CME cash feeder index for 2/7 is $141.69, down $0.12.
LEAN HOGS: Lean hog futures tumbled lower again Friday, closing down $1.17 to up $0.02. The April contract led the market lower, closing at $58.42 per cwt, just 10 cents per cwt above the contract low set last summer. Traders continue to focus on lackluster demand and the fact that market-ready hogs remain at burdensome levels. This could result in increased liquidation next week. Limited shifts developed in pork cutouts, putting even more weakness on primals. Pork cutout values fell $0.29 per cwt, moving to $64.82 per cwt on 258 loads. CME cash lean index for 2/6 is $56.89, down $0.27. DTN Projected lean index for 2/7 $56.53, down $0.36.
MONDAY'S CASH HOG CALL: Steady to $1 lower. Limited direction is expected early next week with most cash bids expected to be steady to 50 cents lower. Market direction may be limited through the early part of the week given the ample supply of market-ready hogs left over from the last two weeks of weather challenges. Monday slaughter is expected to a more normal routine of 477,000 head.
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