Sharp losses are redeveloping in cattle trade early Wednesday morning as traders look for follow-through pressure following late Tuesday liquidation. This could further turn markets lower and start a wide market slide, unraveling the aggressive buyer support seen over the last few weeks in the entire complex. Hog markets remain firm although buyer support remains light. Corn markets are trading higher in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 46 points lower while Nasdaq is down 6 points.
LIVE CATTLE:
Opening call: $1 lower. Follow through pressure has continued to develop through the live cattle futures complex with traders looking for additional market liquidation which is likely to add to the late day pressure seen Tuesday. June futures are leading the market turn lower which is pulling back from the seasonal high and could indicate further market pressure developing across the complex. Additional softness may be seen in beef values if traders remain concerned about widespread cash market weakness starting to develop across the market in the coming weeks. Cash cattle activity remains sluggish early Wednesday morning following extremely light trade which started to trickle into parts of the North late Tuesday. Dressed deals were seen at $225 which is $5 lower than last week's price levels. This is not enough to set the tone for the week, but could get business going given the weakness in the futures trade through the end of the day Tuesday. Active trade may be delayed until the second half of the week. Open interest Tuesday lost 1,661 positions (420,154). Spot June liquidated 14,801 positions (108,874) and August contracts added 10,245 positions (143,323). DTN projected slaughter for Wednesday is 114,000 head.
FEEDER CATTLE:
Opening call: $1 to $2 Lower. Sharp triple digit pressure is seen in feeder cattle futures following limit losses Tuesday. With August futures posting daily limit losses Tuesday, this allows for expanded trading limits once again. Although at this point, it appears that traders are not looking to use this wide price swing, the potential to move prices sharply lower could create a significant dent in market moves and this could effectively put an end to the market rally seen during early May. August futures are holding a $2 per cwt loss in opening trade which continues to add to the building weakness of the feeder cattle market. Cash lean index for 5/5 is 148.08, up 3.73. Open interest Tuesday added 579 position (59,379).
LEAN HOGS:
Opening call: Mixed. Lack of direction is seen in lean hog futures trade early Wednesday morning with traders looking for additional market activity across the complex. This could bring about additional buyer support late in the session based on strong pork values moving back into the market and further cash market support. But the inability to draw significant volume in nearby summer contracts and push prices above spring highs and push past the $80 per cwt price level will become a challenge for the complex. Cash bids are steady to $2 higher with most bids $1 higher. Open interest Tuesday lost 2,097 positions (212,516). Spot month May lost 184 positions (1,463) and June fell 6,332 positions (51,712). Cash lean index for 5/5 is $64.79, up $1.24. DTN projected slaughter for Wednesday is 442,000 head. Saturday runs are expected at 89,000 head.
No comments:
Post a Comment