Sharp losses have quickly flooded into the
complex with triple digit pressure holding in both live cattle and
feeder cattle trade. This overall lack of direction in the market may
continue to add uncertainty to the entire market. Hog futures have
backed away from early gains, but continue to hold moderate gains. Corn
prices are steady to higher in light trade. March corn futures are 3/4
cent higher Wednesday. Stock markets are higher in light trade. The Dow
Jones is 101 points higher while Nasdaq is up 56 points.
LIVE CATTLE:
Sharp losses have quickly developed across all
cattle trade as the feeder cattle market continues to lead the live
cattle futures lower. What started out as narrow to moderate losses has
quickly developed into a triple-digit market tumble as nearby contracts
are trading near $2.50 per cwt lower. This not only is affecting
potential trade activity, but is likely to change the tone of the
market, which has posted moderate to strong gains over the last week.
Cash cattle trade still remains quiet with a few token bids developing
at $127 per cwt in the South and $205 in the North. Asking prices are
seen in the South at $132 per cwt although Northern cattle have not been
priced at this point. The Fed Cattle Exchange Auction today listed a
total of 218 head, with zero actually sold, 127 head listed as unsold,
and 91 head listed as PO (Passed Offer). The state by state breakdown
looks like this: KS 218 total head, with zero head sold, 127 head
unsold, 91 head listed as PO ($126.25); NE - no cattle reported; TX - no
cattle reported; CO - no cattle reported; IA - no cattle reported;
other states - no cattle reported. The delivery date/weighted averages
breakdown is as listed: 1-9 day delivery: 218 head total, 0 head sold;
1-17 day delivery - no cattle reported; 10-17 day delivery - no cattle
reported; 17-30 day delivery - no cattle reported. Boxed Beef cut-outs
at midday are higher, $0.85 higher (select) and up $1.93 per cwt
(choice) with light movement of 61 total loads reported (32 loads of
choice cuts, 9 loads of select cuts, 5 loads of trimmings, 15 loads of
ground beef).
FEEDER CATTLE:
Sharp losses have quickly developed across the
complex with traders focusing on increased market pressure in all cattle
trade. This has moved nearby futures from $3 to $3.50 per cwt lower as
the overall lack of direction in the market continues to limit market
support. There is also a growing sense of market liquidation seen in the
market following the inability to aggressively push prices higher at
the end of last week and initial trade this week. Volatility in the
market is expected to continue through much of the week.
LEAN HOGS:
Light to moderate buyer support is stepping into
the lean hog futures complex. This is adding to the market uncertainty
following strong triple-digit gains seen early in the session. The
support through the week is helping to draw additional trade to the
market, but it is uncertain just how much long support this will build
through the entire complex term. Cash prices are lower on the National
Direct morning cash hog report. The weighted average price is down $0.23
at $64.06 per cwt with the range from $57.00 to $64.16 on 3,005 head
reported sold. Cash prices are unreported due to confidentiality on the
Iowa/Minnesota Direct morning cash hog report. The National Pork Plant
Report posted 171 loads selling with carcass values falling $0.68 per
cwt. Lean hog index for 2/19 is at $71.41, down 0.80 with a projected
two-day index of $70.78, down 0.683.
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