GENERAL COMMENTS:
Narrow trading ranges defined most of the trading session Monday with most nearby cattle and hog futures contracts holding light-to-moderate gains. Long-term support remains rooted in hog futures with traders focusing on strong demand through the end of the year. Cash cattle markets remain undeveloped Monday with bids and asking prices likely to be delayed until the middle of the week. Although both sides probably want to wrap up business by Thursday before Good Friday, trade may be delayed until the second half of the week. The National Daily Direct afternoon hog report was $0.13 higher ($67-$78.50, weighted average $76.38) on 8,312 head sold. Corn futures were higher in light trade with May up 1 3/4 cents per bushel. The Dow Jones Index was 27 points lower with the Nasdaq down 8 points.
LIVE CATTLE: Live cattle trade was confined to a narrow range. Futures closed mixed ($0.25 lower to $0.45 higher). Sluggish trade throughout Monday's session allowed futures to trade mostly higher within a narrow range. The lightly traded April contract saw late-day pressure, falling 25 cents per cwt, while the rest of the complex remained steady to slightly higher. Live cattle could see additional support the rest of the week, following gains last week. Beef cut-outs: higher, up $0.20 (select, $221.22) to up $2.23 (choice, $230.98) with moderate demand and offerings, 93 loads (45 loads of choice cuts, 21 loads of select cuts, 13 load of trimmings, 14 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Limited activity is expected to be seen Tuesday with packer interest remaining light. Bids and asking prices are still undeveloped with most activity expected in the last half of the week.
FEEDER CATTLE: Limited gains slowly developed in feeder cattle as early gains in grain markets and feed prices failed to spark additional interest. Futures settled $0.25 to $0.55 higher. Sluggish trade was seen throughout the day in cattle futures as traders focused on previous support late last week and the ability to continue to shift futures higher in a very slow market. With trade expected to be light through the end of the week, traders are finding comfort in the wide sideways trading range. This will likely contain market moves over the near future with little long-term direction expected to be seen. Although early estimates are out for the end-of-the-week Cattle on Feed report, this had little short-term market impact. CME cash feeder index for 4/12 is $142.99, up $0.21.
LEAN HOGS: Most lean hog futures moved higher Monday as the focus remains on strong long-term demand. Overall, futures closed $0.20 lower to $1.90 higher. Strong support quickly moved into late-year trade with December 2019 through June 2020 contracts holding triple-digit gains. The support throughout the lean hog complex leads to uncertainty over how much follow-through activity will be seen the rest of the week. Traders continue to focus on sales to China, which are typically reported in Thursday's export sales report. But any sense of direction in the trade talks with China that would reduce tariffs would quickly spark additional buyer support in all contracts. Pork cutout values added $1.33 per cwt, moving to $87.04 per cwt on 262 loads. CME cash lean index for 4/11 is $79.34, down $0.02. DTN Projected lean index for 4/12: $79.57, up $0.23.
TUESDAY'S CASH HOG CALL: Steady to $1 higher. Firm buyer support and continued gains in pork cutout values is expected to support market direction through the week. Bids are expected to be steady to firm as packers start moving cash market prices toward June contract prices. Tuesday slaughter is expected at 456,000 head.
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