Friday, June 30, 2017

Friday Midday Livestock Market Update

GENERAL COMMENTS:

Sharp gains have quickly moved into lean hog futures with traders focusing on strong nearby buyer support. This has moved July and August contracts to new contract highs as traders not only pushed strong support into nearby trade, but also through most deferred contracts. Aggressive losses in cattle markets have been quickly trimmed at midday with trader interest seemingly slowing significantly over the last hour of trade. Corn prices are higher in light trade. July corn futures are 5 cents higher. Stock markets are higher in light trade. The Dow Jones is 62 points higher while Nasdaq is up 2 points.

LIVE CATTLE:
Light losses are seen late Friday morning in live cattle futures as traders are heading toward the last hour of trade. With very light trade seen in the market, the inability for additional selling pressure to step back into the market has allowed losses to quickly back away from firm triple-digit moves in nearby contracts, to current shifts lower of 2 to 40 cents per cwt. The overall lack of trade volume in the market continues to be the largest factor in the complex are looking past early next week with the upcoming holiday on Tuesday, but now are focusing on most traders not stepping into the market until the middle of the week or later. Cash cattle trade is expected to be essentially done for the week with some clean-up trade possible through the rest of the day. A few bids have developed during the morning at $119 live basis and $190 dressed basis, and reports of a few cattle trading in the North at $119 live basis for delayed delivery. At this point, with prices falling $3 per cwt in the South and $4 to $5 in the North from last week, the market seems to have been set, and packers will be willing to gain access to additional numbers if the opportunity arises before month end. Beef cut-outs at midday are lower, $1.39 lower (select) and down $1.31 per cwt (choice) with light movement of 75 total loads reported (42 loads of choice cuts, 16 loads of select cuts, 6 loads of trimmings, 12 loads of ground beef).

Feeder Cattle:
Feeder cattle futures remain lower late Friday morning, but traders have quickly backed away from the aggressive triple digit losses that have held the first couple hours of trade. Even though nearby lean hog futures continue to trade 30 to 40 cents per cwt lower, the fact that markets have moved $1.50 to $2 per off of market lows during the session and likely will close the session higher is significant in helping to draw additional support back into the complex at the end of the month. This may help to stimulate some much needed market stability that had been focused upon over the last couple of trading sessions. Light trade is expected to be seen through the rest of the session, but the lack of trade interest may keep markets in a wide price shift. .

LEAN HOGS:
Light trade is seen through lean hog futures at midday, although the aggressive support which developed through the morning has continued to maintain early price rallies. This appears to be able to hold contract highs in both July and August contracts through the end of the month. The ability to maintain these levels, would help stimulate additional strong chart support through the entire lean hog futures over the next couple of weeks. August futures continue to lead the market higher with a $2.50 per cwt rally at midday as prices are holding at $83.25 per cwt. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $2.08 at $84.96 per cwt with the range from $82.00 to $87.00 on 2,496 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $2.35 at $86.11 per cwt with the range from $82.00 to $87.00 on 395 head reported sold. The National Pork Plant Report reported 115 loads selling with prices falling $0.81 per cwt. Lean hog index for 6/26 is at $91.10 up $0.48 with a projected two-day index of $91.50 up $0.40.

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