GENERAL COMMENTS:
Traders quickly reacted to the positive cattle on feed numbers in Friday's USDA report. This helped live cattle and feeder cattle futures to surge to new contract highs in most nearby contract months. The underlying support is likely to continue through the rest of the session, adding potential gains through the rest of the week. Hog futures remained mixed early in the session, but the softness in pork and cash hog prices is causing some volatility to develop in most contract months. December corn is down 2 cents per bushel, and December soybean meal is down $660 per ton. The Dow Jones Industrial Average is up 274 points.
LIVE CATTLE
Triple-digit gains are holding in all live cattle futures trade Monday morning. October and December contracts are leading the complex higher, also posting new contract highs. Early trade interest is adjusting to the moderately bullish Cattle on Feed report Friday, which posted 11.07 million cattle on feed. This is the lowest number since last September, which could indicate that further on-feed reductions may be seen in the months to come. Despite midday pullback in feeder cattle futures, live cattle contracts continue to hold well into midday, and could spark renewed buyer support in the last hour of trade. Cash cattle interest remains extremely sluggish with asking prices and bids still undeveloped. It is likely to be close to midweek before active interest redevelops.
Monday morning's boxed beef prices are higher once again with choice cuts up $3.10 at $348.77 and selects up $0.94 at $318.60 on a total count of 47 loads. Continued support in boxed beef values is not a surprise, but it may not spark renewed support through cash markets over the near future. Dow Jones estimated Monday's cattle slaughter at 118,000, 1,000 higher than a week ago.
FEEDER CATTLE
Aggressive early week gains have flooded into most feeder cattle trade. Although spot-month August contracts are still under light pressure, triple-digit gains are holding in other nearby contracts. October futures are setting contract highs, moving $2.05 per cwt higher at midday to $167.60 per cwt. The lighter-than-expected placement level has sparked early buyer support. Even though this is extremely good news for the market, it is still uncertain just how much long-term support will be seen over the next couple of days. The overall direction of the market is also being supported by recent pressure in grain prices. The CME Feeder Index was priced at $155.79 for Aug. 19.
LEAN HOGS
Mixed trade is seen in lean hog futures with light-to-moderate pressure seen in October futures as prices are hovering at $88.30 per cwt following a 40-cent loss. The firmness in cattle trade is helping to spark renewed underlying support through the rest of the complex, although prices are unable to spark active buyer interest. Morning pressure in pork and cash hog prices has created some uncertainty through the complex, which could lead to further losses as the day continues. Pork primals are mixed, but the generally weaker tone early in the week could create significant pressure in upcoming hog markets. Cutouts are down $4.53 at $114.73 Monday morning on 172.07 loads. Negotiated hog prices are $3.67 per cwt lower with a weighted average price of $92.47 per cwt on 9,192 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $106.95 per cwt. Dow Jones estimated Monday's hog slaughter at 477,000, 5,000 above a week ago, while 9,000 more than year ago levels. The CME Lean Hog Index is estimated at $107.90 for Aug. 20.
No comments:
Post a Comment