GENERAL COMMENTS:
Moderate price pressure has been seen in most livestock trade through the morning Thursday with increased softness developing as the few traders are actively involved in the market ahead of the holiday weekend.
The lean hog futures continue to erode lower as traders are trying to better pinpoint just where the upcoming hogs and pigs report will position expected short- and long-term pork production levels in the new year. With Friday's reports focusing both on cattle and hog reports, there is uncertainty as to just how much of the expected report findings will already be factored into the market and how much of an impact the reports will have next week.
With the week between Christmas and New Year's typically showing very limited trade volume, the potential that the limited volume could add even more volatility to the post report markets Tuesday morning.
March corn is up 2 1/2 at $4.723 and March soybean meal is down $1.10 at $387.6. The Dow Jones Industrial Average is up 98.39 at 37,180.39.
LIVE CATTLE:
Live cattle futures are trading mostly lower in limited trade volume as traders are adjusting and backing away from previous market support that developed late Wednesday. December is the only contract month holding a gain at midday, but the overall lack of volume and interest in the December contract has little impact on overall direction of the market as a whole. February futures are the most active contract month and is leading the complex lower with an 85-cent loss.
Over the next few days, limited volume and market interest may be the biggest factor affecting the cattle market, potentially allowing prices to make moderate to large price swings on very few trades. Traders are also trying to adjust positions in front of Friday's Cattle on Feed report, which is projected to show a 2.2% increase in on feed numbers from year ago. This estimate seems to be the tipping point, as an on-feed number above this level will account for a gain from November levels, and the highest on feed numbers since May 2022.
Cash cattle trade remains quiet with bids redeveloping in most areas during the morning Thursday. Live bids of $170 and Dressed bids of $270 per cwt are available. Asking prices are holding at $173 to $175 live and $272 per cwt dressed. It would not be out of character if active trade held out until sometime Friday, but some activity may start to develop before the day is over Thursday afternoon.
December live cattle are $0.28 higher at $170.3, February live cattle are $0.83 lower at $169.475, April live cattle are $0.80 lower at $173.025.
Boxed beef prices are higher: choice up $2.28 ($291.41) and select up $0.70 ($262.30) with a movement of 80.43 loads (44.88 loads of choice, 11.76 loads of select, 8.45 loads of trim and 15.34 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are showing the most pressure Thursday morning, with losses of $1 per cwt or higher in nearby contracts. The late-day rally in feeder cattle futures Wednesday following the pullback in stock prices seemed to be overdone, as trades focusing on market corrections ahead of the holiday weekend. Traders are also trying to assess just how proactive they should be in positioning ahead of Friday's cattle on feed report.
Over the last three months, overall cattle placements have been the focus of the report, and also has caused the cattle complex to go into a tailspin following the report. Cattle placements will once again be closely watched, but total on feed numbers may move back into the spotlight for the December report.
January feeders are $1.18 lower at $222.875, March feeders are $1.25 lower at $224.5 and April feeders are $1.18 lower at $229.35.
LEAN HOGS:
Lean hog futures are holding moderate to firm losses in most contracts, although limited gains are trickling into spot February contracts through the morning. May through August contracts are most aggressively being targeted with price pressure as traders continue to still be uncertain as to just how much herd liquidation will develop during 2024. This could limit market support in the near future, especially surrounding the holidays where limited trade volume and sluggish cash market direction will be seen.
Traders are looking for some direction from Friday's quarterly hogs and pigs report, but these numbers may not show significant herd reductions, and could continue to limit underlying market support.
February lean hogs are $0.15 higher at $70.375, April lean hogs are $0.38 lower at $76.55 and May lean hogs are $0.80 lower at $82.925. Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 124.14 loads with 111.82 loads of pork cuts and 12.32 loads of trim. Pork cutout values are down $0.89 at $80.33.
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