GENERAL COMMENTS:
Wide trading ranges developed Monday as hog futures swung from limit losses of $4.50 per cwt to aggressive triple-digit gains and back throughout the session. Similar market swings occurred in cattle futures as initial pressure eroded as buyers tried to cover short positions. Corn futures are higher in light trade. September corn futures are 5 3/4 cents higher. Stock markets are lower in active trade. Dow Jones is 767 points lower with NASDAQ down 278 points. In cash cattle trade bids and asking prices are still hard to pin down. Packer interest will not improve significantly until midweek or later. Showlists appear to be generally larger with Kansas offerings steady while other regions are posting increased cattle available to packers. National Daily Direct afternoon hog report is $0.90 lower with a weighted average of $76.01 per cwt. Full range of $67 to $82 per cwt on 7,463 head sold.
LIVE CATTLE: Light gains developed late in the day despite wide market swings ($0.42 lower to $0.67 higher). Early pressure grew as increased liquidation flooded the market Monday morning. The combination of initial limit losses in hog futures and widespread pressure in outside markets started a Monday morning swing lower. By midday, initial selling stops had been reached, leaving a vacuum that was quickly filled by buyers hovering on the sidelines. This pushed prices higher as the oversold market structure started to shatter, allowing positive market gains to slowly develop. Live cattle futures closed mostly higher with firm gains seen in deferred contracts, previously eroded by noncommercial pressure. Beef cut-outs: mixed, $1.04 higher (select, $191.67) and down $0.03 (choice, $214.70) with moderate demand and light offerings, 106 loads (44 loads of choice cuts, 27 loads of select cuts, 6 loads of trimmings, 28 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Market activity is expected to remain subdued Tuesday morning with bids and asking prices yet to be developed until later in the day, potentially not until the second half of the week.
FEEDER CATTLE: Late-day buying offset liquidation seen early Monday morning ($0.77 to $1.17 higher). Wide price swings quickly developed Monday morning with initial triple-digit losses giving way to active gains as buyers stepped into the oversold market late Monday. September feeder cattle prices swung $7.90 per cwt from session lows to session highs, indicating the increased volatility built up in the complex and incredible market uncertainty still building. Although all contracts posted firm gains Monday afternoon, the general tone of the market remains extremely shaky as traders balance outside global market moves with cattle market fundamentals. CME cash feeder index for 8/2 is $141.62, down 0.09.
LEAN HOGS: Wide price swings created additional early week volatility through the bearish hog complex ($2.97 lower to $1.70 higher). Underlying pressure continues through the entire hog market on aggressive stock market pressure and concern that the most recent tariff actions will further limit any business from China. Early pressure posted expanded limit moves of $4.50 per cwt as traders focused on the overall bearish structure following concerns over the weekend that relations with China continued to be strained. Limited follow-through selling in this oversold market allowed buyers to quickly move back into the complex at midday. October futures traded within an $8.40 range through the session, adding increased market shifts as buyers took the opportunity to step back into the complex. Most lean hog futures pulled back from midday gains, closing lower Monday afternoon. This is expected to lead to increased market swings through the week. Pork values posted triple-digit gains based on active support in ham and belly cuts. Pork cutout values added $1.49 per cwt, moving to $88.13 per cwt on 239 loads. CME cash lean index for 8/1 is $84.64, up 0.53. DTN Projected lean index for 8/2 is $84.68, up 0.04.
TUESDAY'S CASH HOG CALL: Steady to $2 lower. The weak market structure seen over the last week and increased price volatility surrounding trade relations with China will limit cash market support. Bids are expected to be scattered through the range early Tuesday. Tuesday slaughter numbers are expected at 472,000 head. Saturday runs are expected at 40,000 head.
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