Strong market pressure has quickly flooded into
feeder cattle markets, which is affecting the movement and direction of
live cattle trade. Hog futures are firming based on short covering at
the end of the week. Corn markets are lower in light trade. March corn
futures are 1 3/4 cents lower. Stock markets are higher in light trade.
Dow Jones is 347 points higher with Nasdaq up 26 points.
LIVE CATTLE:
Firm pressure developed Friday morning through
the complex with traders looking for increased underlying pressure in
feeder cattle trade. The strength in beef values at the end of the week
is being overlooked by traders attention to triple-digit losses in these
feeder cattle futures. Limited direction is expected through the rest
of the complex with traders looking for additional outside market
shifts. Cash cattle trade still remains quiet although bids are becoming
more evident through the morning. Bids are holding at $122 live in the
North and South, while dressed bids are developing at $198 to $199 per
cwt. This is still a long ways from asking prices, and unlikely to gain
interested sellers at this point. Asking prices remain at $126 to $127
live and $202 to $204 dressed. It may be late afternoon before deals are
made. Cattle are priced at $126 to $127 per cwt, while dressed prices
are listed at $203 to $205 per cwt. Boxed Beef cut-outs at midday are
higher, $1.09 higher (select) and up $0.87 per cwt (choice) with light
movement of 58 total loads reported (35 loads of choice cuts, 5 loads of
select cuts, 4 loads of trimmings, 14 loads of ground beef).
FEEDER CATTLE:
Triple-digit losses have quickly expanded Friday
morning as traders focus on uncertainty in the grain markets and the
growing expectations that a deal will develop with China. Any grain
market deal with China will be bearish for feeder cattle on a short-term
basis at least, as this will likely increase production costs in the
entire cattle complex. Even though nearby futures have backed away from
session lows, the potential to break below February lows is adding
weakness to the complex.
LEAN HOGS:
End-of-week short covering has been the main
agenda of traders which continue to focus on bearish fundamentals, but
are covering positions at the end of the week. With trade closed Monday
for Presidents day, the focus on maintaining recent support levels is
sparking renewed buyer interest in nearby trade. Nearby futures are
holding 30 to 60 cent gains, while narrowly mixed moves in deferred
trade is keeping additional volume on the sidelines. Cash prices are
unreported on the National Direct morning cash hog report. Cash prices
unreported on the Iowa/Minnesota Direct morning cash hog report. Pork
carcass values rallied higher on the morning report with prices adding
$2.08 per cwt at $64.84 per cwt with 177 loads traded. Lean hog index
for 2/13 is $55.24, down $0.31, with a projected two-day index is
delayed due to packer submission problems.
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