Mixed trade is seen through the livestock
complex. There is growing uncertainty as to just how much additional
trade volume will develop the rest of the week and if most traders will
wait it out and step back to the table early next week. Corn prices are
higher in light trade. Stock markets are mixed, Dow Jones is 5 points
lower while Nasdaq is up 30 points.
LIVE CATTLE:
Open: Mixed. Light pressure is seen in deferred
contracts as nervousness is seen through the complex as traders don't
quite know what to expect on "tariff day." Friday is when this round of
imposed tariffs are to take effect, which may lead to some market
uncertainty. Livestock traders are most closely focusing on the grain
complex and what impact this will have on soybeans, soybean meal and
other markets. But there is also the concern that this may not be the
end of the line when focusing on the trade war that may not have a quick
ending. Nearby contracts have posted narrow gains, based on follow
through buyer support seen Thursday. This could limit additional market
movement through the rest of the session and well into next week. Cash
cattle activity is going into the Friday morning with just a handful of
token cattle sold in the South at $110. It is not expected that feeders
are going to settle at this level without a significant breakdown in
futures trade through the morning. Asking prices are seen at $113 and
higher in the South and $176 and higher. But this will likely not keep
bids from opening at $110 live and near $170 dressed. But it is expected
that at least moderate trade is needed to be seen by the end of the
week in order to fuel the full week of production next week. Open
interest Thursday gained 647 positions (323,719). Spot month August
contracts lost 3,789 positions (123,561) and October contracts added
2,385 positions (91,894). DTN projected slaughter for Thursday is
118,000 head.
FEEDER CATTLE:
Open: 10 to 40 cents lower. Limited trade
activity is likely to keep the overall market sluggish. Initial selling
pressure is based on position squaring activity following Thursday's
gains. This could add some mixed trade through the morning, although
traders seem to be focused more on outside market and political issues
that could affegh the livestock trade. The movement in the grain and
feed markets continues to be the biggest focus in the feeder cattle
trade, which will impact overall production costs through the end of the
year. Cash index for 7/3 is listed at $144.73 up 0.96. Open interest
Thursday added 378 positions (47,215).
LEAN HOGS:
Open: 10 to 50 cents lower. Light to moderate
pressure is seen early Friday morning as follow-through selling is
developing in the first few minutes of trade. Overall volume remains
sluggish and is likely to stay that way through the end of the day as
many traders seem to have already set their positions for the week due
to the limited holiday trading schedule early in the week. This could
spark some increased movement early next week. But traders are also
concerned about just what impact the current tariffs that are scheduled
to be implemented Friday will have on the short and long term direction
of the market. Cash hog trade Friday is steady to $1.00 lower per cwt.
Most bids are steady. Open interest Thursday added 1,789 positions
(233,856). Spot month July fell 1,728 positions (12,950) and August
slipped 1,509 positions (71,577). Cash lean index for 7/2 is $82.51 down
0.46. DTN projected slaughter for Friday is at 447,000 head. Saturday
runs are expected at 150,000 head.
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