Moderate to strong pressure has continued in feeder cattle futures, pushing May futures to new contract lows. Sluggish moves are seen in live cattle and lean hog trade as traders are moving to the sidelines late morning. Corn futures are lower in light trade. July corn futures are 2 cents lower. Stock markets are lower in light trade. Dow Jones is 24 points lower with Nasdaq down 64 points.
LIVE CATTLE:
Extremely narrow trading ranges are seen through the complex with June futures holding a 17 cent loss in very limited trade Tuesday morning. Except for expiring April contracts, all other markets are trading 15 to 25 cents lower through midmorning. The focus on end-of-month trade is keeping most traders confined to the sidelines. This is essentially overlooking the strong pressure being seen in feeder cattle trade. But the live cattle complex will not overlook the softness in nearby feeder cattle futures for long, as increased volume is likely to develop Wednesday when traders turn the calendar to the month of May. Cash cattle interest remains sluggish with bids and asking prices still undefined. It is likely that more interest will surface Wednesday with the potential for light to moderate trade to develop midweek following previous week's patterns. Boxed Beef cut-outs at midday are mixed, $1.35 higher (select) and down $0.86 per cwt (choice) with light movement of 65 total loads reported (31 loads of choice cuts, 19 loads of select cuts, 5 loads of trimmings, 10 loads of ground beef).
FEEDER CATTLE:
Firm follow-through pressure has continued to develop through feeder cattle trade Tuesday morning with technical weakness breaking through support levels of $150.27 per cwt in August contracts. With May contracts already at contract lows following the sharp $1.30 per cwt losses seen during the morning, traders are now focusing on the overall lack of support in other nearby contract months. Even though firming beef demand is expected, the looming questions about summer and fall feeder cattle supplies as well as trade talks with Japan continue to add uncertainty to the beef complex. At this point, most of the emphasis is on feeder cattle trade with live cattle markets still being impacted by strong current demand.
LEAN HOGS:
Limited interest is seen through the entire lean hog complex Tuesday morning as traders remain focused more on squaring positions before month end than any significant market shifts. Nearby futures remain slightly higher with June contracts holding a 12 cent gain. This is a significant shift from the strong early trade that moved into the market. Once traders covered short positions from the past couple of trading days, it appears that most business has quickly moved to the sidelines. This should allow markets to wander within a narrowly mixed range through the end of the session. Traders are likely to become more focused Wednesday as they start charting market shifts through early May. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.81 per cwt at $80.60 per cwt with the range from $71.00 to $83.25, on 6,328 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $1.29 per cwt at $82.08 per cwt with the range from $78.00 to $83.25, on 3,883 head reported sold. Pork values eroded at the end of the month even though trade volume remained impressive. Pork cutouts fell $1.59 per cwt at $83.40 per cwt with 203 loads traded. Lean hog index for 4/26 is $83.46 down 0.27, with a projected two-day index is $83.27 down 0.19.
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