GENERAL COMMENTS: Limited movement seen in cattle futures left traders subdued following the aggressive moves higher at midweek. Hog futures attracted most of the attention Thursday with triple-digit gains. Increased hog inventory in the quarterly hogs and pigs report may curb current support through the end of the month as traders assess current inventory levels and farrowing intentions. Corn futures ended lower Thursday in limited trade. July futures is 3 1/4 cents per bushel lower. Dow Jones Index is 10 points lower with Nasdaq up 57 points.
CASH MARKETS: Cash cattle markets are quiet with a few token bids reported in Nebraska at $107 to $108 live and $175 to $176 dressed. Through the week, dressed bids have improved slightly, but the amount of bids seen in all areas indicate a lack of interest for packers to gain access to cattle. Asking prices are stable with earlier levels mostly at $111 to $112 live and $182 dressed. National Daily Direct afternoon hog report is $1.56 lower with a weighted average of $69.14 per cwt. Full range of $62 to $71.00 per cwt on 7,034 head sold.
LIVE CATTLE: Limited pressure developed through the complex, following feeder cattle prices lower ($0.45 lower to $1.57 higher). June futures, which are nearing expiration, rallied higher, closing up $1.57 per cwt as traders tried to adjust positions before the end of the month. The rest of the complex closed lower after remaining stuck in a narrow sideways pattern through the session. A lack of volume kept many traders on the sidelines following strong support Wednesday. With August futures testing short-term resistance levels of $105.55 per cwt, buyers took a breather following the rally Wednesday. Given the renewed technical reversal seen in live cattle trade during late June, follow-through support could move back into the complex in the first two weeks of July. A move above $105.55 and $106.82, respectively, would solidify a bullish market move in live cattle trade. Given the current supply of cattle and sluggish beef movement, it is likely that prices will continue to establish a longer-term sideways range between $102 and $106 per cwt through most of the summer.Beef cut-outs: lower, $1.66 lower (select, $196.90) and up $0.67 (choice, $219.03) with light demand and offerings, 133 loads (61 loads of choice cuts, 42 loads of select cuts, six loads of trimmings, 24 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Limited interest has developed through the week, leaving any needed trade for Friday. Bids are expected to redevelop in some areas Friday morning, but it is uncertain how active packers will be to secure trade before the end of the month.
FEEDER CATTLE: Late day pressure pushed feeder cattle prices lower ($0.02 to $0.75 lower). Mixed trade Thursday took the emphasis off midweek gains and the ability to push prices away from contract lows at the end of the week. Limited activity is seen through the complex, allowing prices to soften at the closing bell, but holding onto the majority of Wednesday's rally. Trades are caught between soft market fundamentals and renewed technical support. This may add increased volatility Friday, allowing for wide market swings with traders closing out the month of June. CME cash feeder index for 6/26 is $131.87, up $0.36.
LEAN HOGS: Active gains swept though hog futures as traders focus on continued support ($0.27 to $2.12 higher). Moderate to strong gains have developed through all lean hog trade as traders adjusted positions ahead of the quarterly hogs and pigs report released Thursday afternoon. Technical support developed in all nearby contracts with October and December futures posting gains over $2 per cwt. Quarterly hogs and pigs reports posted a 4% increase in inventory over year ago levels. Even though inventory levels only increased 1% from first quarter levels, the increased supply levels is likely to put additional pressure on the market through the end of the week. Pork values firmed following wide price swings in primal cuts. Pork cutout values added $0.22 per cwt, moving to $74.19 per cwt on 340 loads. CME cash lean index for 6/25 is $77.91, down $0.40. DTN Projected lean index for 6/26 is $77.26, down $0.35.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure is expected to continue through the end of the week, despite strong support in futures trade Thursday. Packers continue to gain access to market ready hogs through the summer, allowing for choppy but weak cash market prices. Most bids are expected to be 50 cents to $1 lower. Friday slaughter numbers are expected at 471,000 head. Saturday runs are expected near 57,000 head.
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