Mixed trade has developed across livestock trade
with April lean hog trade pushing $1 per cwt higher in limited
activity. The hope and expectation that any trade deal with China would
spark aggressive buyer support is helping to limit pressure in the
complex. Corn futures are higher in sluggish trade. May corn futures are
1 3/4 cent lower. Stock markets are higher in light trade. Dow Jones is
86 points higher with Nasdaq up 42 points.
LIVE CATTLE:
Follow-through pressure quickly moved through
the entire complex with nearby contracts steady to 20 cents lower with
more aggressive pressure developing through fall contract months. The
concern that the recent announcement of increased cattle on feed will
not only skew the overall supply level of beef through the rest of the
year. But the growing concern is if this trend of larger placements will
continue through the rest of the year, and further erode overall buyer
activity through the complex. Cash markets are undeveloped with bids and
asking prices still unavailable. This is not surprising, as bids are
not likely to be seen until late in the day or potentially Wednesday.
Most trade will likely be pushed off to the second half of the week, and
potentially Friday. Boxed Beef cut-outs at midday are higher, $0.54
higher (select) and up $0.69 per cwt (choice) with light movement of 64
total loads reported (41 loads of choice cuts, 9 loads of select cuts, 5
loads of trimmings, 9 loads of ground beef).
FEEDER CATTLE:
Mixed feeder cattle trade has developed with the
complex a mixture of nearby verses deferred trade direction through the
morning. This is holding March and April prices 15 to 67 cents per cwt
higher, while all other trade is under pressure, falling 50 cents per
cwt based on pressure in live cattle trade. The underlying pressure seen
Monday has slowed significantly as traders try to establish more stable
market shifts due to emotions being held in check. This could add some
additional moderate swings through the near future, although traders
seem to look back to fundamental support through the end of the month
before aggressively moving back to the complex.
LEAN HOGS:
Strong underlying support moved back into the
lean hog complex with April futures sparking renewed gains with a $1 per
cwt developing following a morning filled with narrowly mixed price
shifts. This may continue to spark some underlying gains based on the
expectation that domestic and export demand will continue to solidify
through the next several of months. But there is little if any official
indication that continued sales to China will keep stimulating the
market. But for the most part, there seems to be a strong expectation
from all parties that this demand growth to China will help to solidify
buyer activity. Cash prices are unreported at this time on the National
Direct morning cash hog report. Cash prices are unreported at this time
on the Iowa/Minnesota Direct morning cash hog report. Pork values
continue to firm as steady to active buying is moving through the
complex. Pork cutouts gained $1.10 per cwt at $81.30 per cwt with 243
loads traded. Lean hog index for 3/22 is $64.97, up $2.56, with a
projected two-day index is $67.13, up $2.16.
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