Friday, November 9, 2018

Friday Closing Livestock Market Summary - Beef Futures Exit Week With Ugly Losses, Disappointed by Reluctant Packer Bids

GENERAL COMMENTS:
A light-to-moderate trade has developed in parts of the North, with live deals marked at $113 to $114.50, generally $1.50 to $2 lower than last week. Dressed business in that area ranges from $179 to $180, steady to $1 lower than last week's weighted average basis Nebraska. A light-to-moderate trade has also surfaced in parts of the South with live deals at $114 to $115, mostly $114, generally $2 lower than last week. According to the closing report, the national hog base is $0.97 lower compared with the Prior Day settlement ($48-$54.75, weighted average $53.35). December corn fell a short 4 cents lower, checked by larger-than-expected stocks held by China. The stock market closed lower with the Dow off 201 and the Nasdaq down by 123. From Friday to Friday, livestock futures scored the following changes: Dec LC, off $2.50; Feb LC, off $4.40; Nov FC, off $3.50; Jan FC, off $5.95; Dec LH, off $2.32; Feb LH, off $5.15.

LIVE CATTLE:
Cattle bulls were hoping short-bought packers would eventually have to walk bids some higher. But when the opposite proved true, mocking higher asking prices, live contracts quickly fell out of bed. When CME trading was officially closed (and long before late-week cash potential was determined), live contracts had collapsed. Beef cut-outs closed significantly lower with the choice off $0.87 ($215.20) and select off $0.39 ($198.72). Box demand was called light with light-to-moderate offerings.

MONDAY'S CASH CATTLE CALL:
Steady-$1 lower. Activity in cattle country early next week will be limited to the assessment of new showlists. Our guess is the new fed offering will be somewhat larger than this week.

FEEDER CATTLE:
Feeders issues buckled late this week, closing just before the weekend by $1.17 to $2.47. Needless to say, buying interest here was drained in large part by the eroding targets of deferred live futures. CME cash feeder index: 11/08: $151.63, off $0.60.

LEAN HOGS:
Lean hog futures closed mostly lower with 2019 issues finishing 62 cents to $1.07 lower. Such new year caution clearly reflects a concern about adequately slaughter capacity will align with pork production plans and global trade. Unable to find its way out of the woodshed, carcass value took another thrashing Friday, losing another buck plus thanks to shrinking demand for fresh cuts, picnics and bellies. The cut-out totaled $70.27, off $1.30. CME cash lean index for 11/07: $63.38, off $0.34 (DTN Projected lean index for 11/08: $62.77, off $0.61).

MONDAY'S CASH HOG CALL:

Steady-$1 lower. Hog buyers are expected to resume procurement chores on Monday with generally defensive efforts, helped in that regard by historically huge market hog supplies.

#ccc

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