GENERAL COMMENTS:
Nearby lean hog futures turned sharply lower
Wednesday following China's announcement that while it would exempt
certain U.S. products from the latest round of tariffs, pork wasn't one
of them. Meanwhile, cattle futures saw strong gains, further moving away
from contract lows and helping to solidify renewed commercial buying.
Cash cattle trade remains undeveloped despite the rally in futures. Bids
have become more evident in all areas with packers bidding $97 to $98
per cwt in the South live basis and $156 to $157 dressed and $100 live
in the North. Although some sales may be uncovered Thursday, active
trade is likely to be pushed off until Friday without a significant
shift in futures or beef values develops. The National Daily Direct
afternoon hog report was $1.50 lower ($44-$54, weighted average $47.27)
on 12,222 head. Corn prices slipped slightly lower in limited activity
with December down 1 1/2 cents. Stock markets were higher in light trade
with the Dow up 227 points and the NASDAQ up 85 points.
LIVE CATTLE:
Live cattle closed $1.55 to $2.40 higher. Live
cattle futures moved triple digits higher Wednesday morning, expanding
the shift that developed late Tuesday. Although it is hard to put a
finger on the exact reason for this change in direction, the extreme
pressure the market has been under the past month has been wearing thin,
making an abrupt jump higher not totally unexpected. Futures will look
for continued support through the end of the week, but pressure in beef
values and a still-weak cash cattle market will make sustained gains
difficult. Beef cutouts: lower, down $2.58 (select, $198.40) to down
$5.49 (choice, $219.89) with moderate-to-good demand and moderate
offerings, 166 loads (87 loads of choice cuts, 40 loads of select cuts,
15 loads of trimmings, 23 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to lower. Cash cattle trade remains
generally undeveloped going into Thursday morning. The wide gap between
asking prices and current bids may limit market activity until later in
the week.
FEEDER CATTLE:
Futures closed $2.15 to $2.97 higher. Feeder
cattle futures quickly jumped triple digits higher Wednesday on
spillover support from live cattle and as grain futures slipped lower in
limited trade. The abrupt shift from short-term lows is attracting
moderate-to-strong commercial support in nearby contracts with the
September contract moving back above $136 per cwt for the first time
since Aug. 26. This technical shift higher still has road blocks to
bypass before gaining long-term support, but traders continue to focus
on the support seen in cattle markets over the past two days. CME cash
feeder index for 9/9 is $136.44, down $1.33.
LEAN HOGS:
Futures closed $0.57 to $2.55 lower. All lean
hog futures contracts fell Wednesday as Tuesday's gains were
overshadowed by China's announcement that, while it was excluding
certain U.S. products from its tariff list, pork was not one of them.
The fact that pork is in short supply in China and domestic pork prices
in China have surged due to African swine fever limiting production
makes it clear this was a conscious decision by the Chinese government
to retaliate against the U.S. in the ongoing trade fight. Although
prices backed away from session lows, the strong pressure in the October
contract left the complex unsupported. Pork cutout values shifted
higher on firm primal support. Pork cutout values gained $0.46 per cwt,
moving to $72.45 per cwt on 314 loads. CME cash lean index for 9/9 is
$62.99, down $0.76. DTN Projected lean index for 9/10 is $61.85, down
$1.14.
THURSDAY'S CASH HOG CALL:
Steady to $2 lower from last week. Aggressive
plant needs are doing little to stabilize cash markets, as ample
market-ready hogs are available given the market pressure midweek. Most
bids are expected $1 per cwt lower. Thursday slaughter numbers are
expected at 484,000 head. Estimated runs Saturday are at 192,000 head.
 |
| #completeherdhealth |
No comments:
Post a Comment