GENERAL COMMENTS:
Strong gains developed early in the feeder cattle futures Thursday morning with triple-digit support sparking renewed interest through the entire complex. But this all changed following grain market reports, which pushed corn prices 24 cents per bushel higher. Feeder cattle futures are now trading mixed in a narrow to moderate range following the report. Hog futures are also showing firm support, as traders are adding to active support seen Wednesday. The potential to spark further buyer activity at these price levels could quickly change the tone of the market through the next couple of weeks. Live cattle futures remain sluggish with prices mixed in a very narrow range. Concerns of stable cash values may once again offset support in beef values and keep futures traders looking for additional incentive to step back into the market. December corn is up 24 cents per bushel and December soybean meal is up $7.90 per ton. The Dow Jones Industrial Average is down 93 points.
LIVE CATTLE
October live cattle are trading up $0.50 at $128.05, adjust to the morning shift in feeder cattle and grain prices. August live cattle futures are showing midmorning pressure, falling 20 cents per cwt despite narrow gains seen through the rest of the complex. August contracts remain very lightly traded, but traders still feel that this is a fair assessment of cash market values at this point. This is likely to limit the overall movement in spot August contacts, although October through February futures are likely to focus on expected market support and the ability to take advantage of the surging beef values. There is still limited consensus about the ability for beef values to maintain the recent momentum, or even price levels within near current price ranges as summer beef buying is expected to slow following the Labor Day weekend. This could create an even larger disparity of price shifts but may not bring needed support to either futures or cash prices in the near term. Weekly beef export sales and shipments posted total sales at 13,600 metric tons with shipments for the week listed at 18,600 metric tons. Japan led the weekly sales list with 6,000 metric tons sold, while South Korea posted the largest export number, also with 6,000 metric tons shipped. Cash cattle interest remains generally quiet with bids undeveloped following light to moderate trade in the South and limited trade in the North Wednesday afternoon. Asking prices remain at $122 and higher live basis in the South and $200 and higher in the North. This is expected to spark renewed underlying support for feeders to hold out for steady to higher price levels for the week. The limited cash sales seen last week should cause packers to have a larger appetite this week, but we have seen this many times before, that packers' interest doesn't always follow conventional thinking or logic.
Thursday morning's boxed beef prices are $289.61 on a total count of 38 loads. The limited movement in boxed beef trade Thursday morning could show signs that beef values are starting to cool. But the recent market surge has been incredible, although surrounding markets have not followed the higher market trend. Dow Jones estimated Thursday's cattle slaughter at 121,000, steady with a week ago.
FEEDER CATTLE
Feeder cattle futures started off strong Thursday morning with strong triple-digit gains helping to set contract highs in October and November contract months. But following the morning crop reports, corn prices skyrocketed higher, quickly cooling any support seen in the feeder cattle complex. At midday, feeder cattle futures are holding losses of 40 cents to $1 per cwt as traders continue to focus on the higher cost of production and how much long-term impact this market shift in corn prices will have on the overall cattle market. Cash feeder cattle prices remain generally mixed through much of the weekly auctions, as the recent support in grain markets and the inability for live cattle futures to follow beef prices higher has caused some limited concern by feeders placing cattle through late summer months. The CME Feeder Index was priced at $156.19 for Aug. 10.
LEAN HOGS
October lean hog futures have regained additional buyer support with prices holding gains of $0.62 per cwt with prices at $86.47 per cwt midmorning. At current price levels, this two-day move would account for a $2.60 per cwt rally over Tuesday's lows. If this buying momentum and underlying market support can continue, it is expected that even more confidence will develop through the end of the week. Total pork sales reported in the weekly export sales report are 14,600 metric tons. China posted limited purchases, with only 600 metric tons sold. Mexico and Japan on the other hand were the largest weekly buyers with 5,300 and 5,200 metric tons purchased respectively. Pork exports posted 27,600 metric tons with Mexico on top of the leader board with 12,600 metric tons shipped. China exports are reported at 5,200 metric tons, enough to still come in second-highest of export destinations for the week. Sharp gains once again developed in belly cuts posting a nearly $20-per-cwt rally Thursday morning. Cutouts were up $3.40 at $127.36 Thursday morning on 147.63 loads, as with ham cuts up $29.92 per cwt while belly cuts are $14.63 higher. Negotiated hog prices are $0.15 per cwt lower with a weighted average price of $97.45 per cwt on 3,365 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $108.93 per cwt. Dow Jones estimated Thursday's hog slaughter at 475,000, 3,000 above a week ago. The CME Lean Hog Index is estimated at $110.45 for Aug. 10.
No comments:
Post a Comment