GENERAL COMMENTS: Livestock futures tumbled from the early minutes of trade Thursday with many contracts closing triple digits lower. A lack of reported weekly pork trade to China led to limit losses in hog futures. Technical pressure carried over from Wednesday's losses, pushing contracts through support levels. Additional losses could be seen Friday as the market structures remain weak. Cash cattle trade in the North started to develop Thursday morning with additional volume expected to continue late in the day. Prices were seen at $127 live and $205 dressed. This is generally $3 per cwt lower than last week. Southern trade Wednesday was steady to $1 per cwt higher at $126 to $127 on most cattle sold. Although some additional numbers may develop Friday, especially in the North, the tone of the market is expected to be set. It is quite possible that trade in the South is done for the week, once again following the trend over the last few weeks of moderate midweek trade sufficient for packers needs. The National Daily Direct afternoon hog report was $0.50 higher ($73.00 to $84.00, weighted average $81.24) on 7,384 head sold. Corn futures were higher in light trade with July up 1 1/2 cents per bushel. The Dow Jones Index was 121 points lower with Nasdaq up 18 points.
LIVE CATTLE: Triple-digit losses of $2.00 to $2.97 swept through live cattle trade again Thursday for the second straight trading session. The June contract led the complex lower with a $2.97-per-cwt loss. This resulted in the contract breaking through its support levels set during the spring months and setting a new 2019 low. The building pressure in the complex is technically driven, as limited fundamental direction is yet to be seen over the last couple of weeks. The move out of the long-standing sideways market trend is likely to add even more pressure, as will concerns about growing cattle and beef supplies through the spring and summer months. Beef cut-outs: lower, down $0.53 (select, $219.75) to down $0.03 (choice, $232.93) with moderate demand and offerings, 159 loads (106 loads of choice cuts, 27 loads of select cuts, 10 load of trimmings, 16 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady with Thursday trade. The tone of the market is expected to have been set over the last two trading days with prices in the South steady to $1 per cwt higher than last week and Northern trade generally $3 per cwt lower. There could be some additional activity developing Friday, especially in the North, but overall direction may not change.
FEEDER CATTLE: Feeder cattle futures saw sharp losses of $2.97 to $3.55 on technical pressure. Without hesitation or even a hint of short-covering interest in the complex Thursday, traders quickly and aggressively liquidated positions following midweek losses. Contracts breaking through short-term support levels this week have changed the structure of the market and have given sellers the opportunity they were looking for. August fell $3.47 per cwt Thursday, bringing the total two-day loss to $6.44 per cwt. This move resulted in the contract breaking through April lows, but it is still nearly $3 per cwt above March support levels. Additional end-of-the-week volatility is expected, but the limited trade volume could allow markets to shift in either direction Friday. CME cash feeder index for 4/25 is unavailable at this time.
LEAN HOGS: Lean hogs closed $1.32 to $3.00 lower following a bearish Export Sales report released Thursday morning. Traders' reacted aggressively to the news of no new U.S. pork sales to China. June through December futures closed down the $3-per-cwt limit. This opens the door for expanded trading limits Friday. Even though prices have fallen sharply through the week, markets still remain well above support levels set in March. The volatility over potential demand needs due to African swine fever continues to add uncertainty to market direction. Pork cutouts fell sharply following a $22.78-per-cwt loss in belly cuts. Pork cutout values fell $3.26 per cwt, moving to $83.72 per cwt on 305 loads. CME cash lean index for 4/23 is $82.79, up $0.72. DTN Projected lean index for 4/24 $83.40, up $0.61.
FRIDAY'S CASH HOG CALL: $1 lower to $1 higher. Futures trade losses are expected to have a light-to-moderate impact on short-term cash hog prices due to the desire and need to gain access to daily procurement levels. Most bids are expected to be steady to weak early Friday. Friday slaughter is expected at 464,000 head. Saturday runs are expected near 141,000 head.
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