Thursday, April 12, 2018

Thursday Closing Livestock Market Summary - Cattle Futures Surge Higher to Land Triple-Digit Gains

GENERAL COMMENTS
Light trade volume surfaced early in parts of Texas feeding country at $117-$118 (about steady with last week). But once the board went into hyper-drive, asking prices were quickly jacked higher and buyers proved unwilling to give immediate chase. According to the closing report, the national hog base is $1.40 higher ($43-$52, weighted average $49.29). Corn futures closed a penny plus higher. Traders remained cautious concerning planting conditions over the next several weeks. The stock market closed higher with the Dow up 293 points and the Nasdaq gained 71.
LIVE CATTLE
Live contracts closed sharply higher Thursday, up 170 to 225. Spurred by aggressive short-covering, technical-buying (especially once spot April cleared resistance at 115), and signs of greater packer spending potential, most futures finished near the highs of March 16. Besides these three workhorses, bullish behavior was additionally cheered by a report that President Donald Trump was reconsidering his earlier decision to stay out of the TPP. Note that August through December closed above 10-day moving average highs. Beef cut-outs: mixed, up $0.06 (select: $200.67) to off $0.59 (choice: $212.48) with light-to-moderate demand and offerings (63 loads of choice cuts, 51 loads of select cuts, 8 loads of trimmings, 13 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $2 higher. It's been some time since the feedlot trade has faced a late-week standoff. Yet here we are. Feedlot managers will be pricing cattle higher in the morning ($120-$122 in the South; $190-$192 plus in the North). Packers will be short-bought yet nervous about narrowing margins.
FEEDER CATTLE:
Feeders ran higher through the session, even at a faster clip than their live counterparts. Prices settled 327 to 442 points in the green. The closely watched August contract really managed to light up the technical scoreboard when everything was said and done. The late-summer issues successfully closed above the 10-day moving average high, north of the 38% retracement of the entire late-Feb-early April price drop, and right at the highest level seen since March 16. The next layers of retracement resistance sit at $146.35 (50%) and $148.55 (62%). CME cash feeder index: 04/11: $135.76, up $0.91.
LEAN HOGS:
Lean futures closed mostly 35 to 147 higher with most of the buying energy focused on the front four months. Summer contracts landed their best settlement since March 16. Furthermore, July was successful in closing above its 40-day moving average for the first time since Feb. 23. The carcass value closed modestly higher as a $5 jump in the belly primal offset weakness in most other cuts. Pork cut-out: $65.86, off $0.71. CME cash lean index for 04/10: $53.02, up $0.53 (DTN Projected lean index for 04/11: $52.97, off $0.05).
FRIDAY'S CASH HOG CALL:
$1 higher. Look for the late-week cash trade to retain a firm undertone as market hog numbers continue to tighten.

No comments:

Post a Comment