GENERAL COMMENTS:
Sharp early losses in lean hog futures sparked increased pressure as the Monday session continued. With October lean hog futures falling $3 per cwt and hitting limit losses, pressure spilled over to the rest of livestock trade. Corn futures moved higher in light trade. September futures closed 2 1/2 cents per bushel higher. Dow Jones Index is 42 points higher with Nasdaq down 34 points. Cash cattle markets remained subdued Monday with showlist distribution and inventory taking the main focus throughout cattle country. Showlists appear to be higher in most areas, with Kansas offerings generally steady, while other regions posted higher numbers offered. This is not surprising given the overall light trade last week. Business may be delayed until the last half of the week once again. National Daily Direct afternoon hog report is 3.37 higher with a weighted average of $81.46 per cwt. Full range of $72 to $88 per cwt on 8,155 head sold.
LIVE CATTLE: General pressure in livestock futures weakened live cattle interest Monday (steady to $0.45 lower). Live cattle futures were unable to hold light to moderate gains seen early Monday following spillover pressure from lean hog and feeder cattle contracts. Although little additional fundamental or technical direction was seen in the live cattle complex, the bearish pressure associated with triple-digit losses in lean hog and feeder cattle futures was too much to handle for cattle buyers. August futures remained unchanged in limited trade, while other nearby contracts eroded through the end of the session, falling 35 to 45 cents at closing bell. The underlying tone across the market is expected to remain firm, but cautious going into late July trade. Beef cut-outs: higher, $1.42 higher (select, $189.76) and up $1.09 (choice, $213.26) with moderate demand and light offerings, 91 loads (36 loads of choice cuts, 29 loads of select cuts, 8 loads of trimmings, 18 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Limited interest is expected Tuesday morning as bids and asking prices are not likely to develop until at least midday or even later. Trade could be pushed off until late week once again.
FEEDER CATTLE: Firm pressure developed following widespread livestock weakness and grain market support ($0.82 to $1.42 lower). Triple-digit pressure quickly developed in nearby trade as feeder cattle futures aggressively backed away from last week's support. This underlying pressure may add even more uncertainty to the complex as traders look for underlying support and potential stability in grain prices. All remaining 2019 contracts are stuck in a tight trading range, priced at $142 per cwt. The lack of premium across the complex is adding additional concerns that wide ranging buyer interest may be hard to find over the near future. CME cash feeder index for 7/24 is $137.42, up 0.71.
LEAN HOGS: Limit losses Monday sparked additional longer-term market concerns (steady to $3.00 lower). Sharp losses quickly moved into lean hog futures Monday morning with triple-digit pressure quickly setting the tone for a weaker underlying market softness. This lack of support allowed October futures to close $3 per cwt lower, hitting daily limit losses. This will allow extended trade limits to come into play Tuesday, to $4.50. Although recent market support over the last three has sparked a bullish trend, sharp pressure two of the last three sessions is quickly putting long-term support into question. Pork values slipped lower in early week activity following mixed primal moves. Pork cutout values fell $0.34 per cwt, moving to $84.04 per cwt on 223 loads. CME cash lean index for 7/25 is $78.86, up 1.63. DTN Projected lean index for 7/26 is $80.36, up 1.50.
TUESDAY'S CASH HOG CALL: Steady to $2 higher. Firm follow-through support is expected to redevelop in cash hog trade early Tuesday despite the pressure in futures markets. Most bids are expected steady to $1 per cwt higher. Tuesday slaughter numbers are expected at 472,000 head.
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