Friday, October 26, 2018

Friday Midday Livestock Market Summary - Late-Week Buying Develops Friday

General Comments
Firm market gains have developed across the entire complex with traders focusing on triple-digit gains sweeping through the entire complex. There is growing support in live cattle and lean hog trade based on a combination of futures and cash market support. Corn markets are higher in light trade. December corn futures are 7 cents higher. Stock markets are lower in light trade. The Dow Jones is 133 points lower while Nasdaq is down 66 points.

LIVE CATTLE:
Strong underlying support is slowly developed midday Friday in live cattle trade. This price support is offsetting the previous market pressure earlier in the week and helping traders to cover short positions. Triple-digit gains are seen in nearby trade with lightly traded October contracts holding a $1.65 per cwt rally based on strong underlying support moving into all contracts. Cash cattle trade is starting to develop in most areas through late morning with deals seen at $114 to $115 per cwt live basis and $180 per cwt dressed. This is $3 to $6 per cwt higher than last week's price levels, and helping to support underlying bids in other areas. Some additional trade may develop through the end of the day. Asking prices are holding at $115 and higher live and $180 dressed on cattle still on showlists. Boxed Beef cut-outs at midday are higher, $1.02 higher (select) and up $0.62 per cwt (choice) with light movement of 48 total loads reported (26 loads of choice cuts, 6 loads of select cuts, 4 loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:
Active buying midday Friday has offset early market pressure that has swept through the complex over the last couple of days. End-of-week short covering was the initial spark that led to increased market support Friday morning, but additional buying is being fueled by active support through nearby trade. November futures are holding a $1.37 per cwt rally, moving prices back above $155 per cwt. Feeder cattle futures remain stuck in a wide sideways trend, and the recent shifts higher are sustaining this market move.

LEAN HOGS:
Firm gains have quickly developed midday Friday in nearby lean hog futures as traders seemed to quickly dispel any growing concern that follow-through weakness will move into the complex through the end of the week. Nearby trade is holding prices 50 cents to $1 per cwt higher with traders looking for additional follow through support based on the market rally midweek. Even though trade remains sluggish and prices are not expected to show significant additional improvement through the end of the session, this is setting the tone for renewed buying activity early next week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is $0.17 lower at $56.85 per cwt with the range from $55.50 to $57.63 on 4,937 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 204 loads selling on the morning report. Pork carcass values slipped $0.12 per cwt at $77.05 per cwt. Lean hog index for 10/24 is at $65.03 down 0.43 with a projected two-day index of 64.61, down 0.42.

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