Weakness quickly developed across lean hog trade with nearby contracts holding losses of $2 to $2.90 per cwt at midday. The pressure sweeping through hog trade has slowly but steadily spilled over to cattle markets, which are now trading mostly lower. Corn futures are higher in light trade with the September contract up 2 1/2 cents. Stock markets are mixed in light trade. The Dow Jones is 44 points higher with the NASDAQ down 53 points.
LIVE CATTLE:
Early support Monday morning quickly faded as widespread pressure through the rest of the complex added to uncertainty in live cattle trade. Although spot August is holding minimal gains at midday, the rest of the complex quickly eroded, with 30- to 60-cent losses holding at midday. The firm pressure in feeder cattle as well as expected lackluster moves in beef values at the end of the day is expected to keep cattle markets under light-to-moderate pressure. Cash cattle activity remains quiet Monday with the focus on showlist distribution and inventory-taking. Following light late-week trade, it may be midweek or later before any significant interest is seen through the complex. Boxed beef cutouts at midday are higher, up $0.23 (select) to up $0.82 per cwt (choice) with light movement of 42 total loads reported (20 loads of choice cuts, 10 loads of select cuts, no loads of trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Firm morning pressure is developing across feeder cattle trade as renewed support in grain trade is once again putting the focus on production and feed costs through the end of the year. The August contract is leading the complex lower, down $1.07 per cwt, as traders are uncertain whether recent gains in live cattle trade will be able to hold over the near future. The potential for late-month pressure is seen in all nearby trade. The lack of premium in all remaining 2019 contracts continues to create caution through the market as traders focus on uncertainty in input costs not only during the fall, but well into next year.
LEAN HOGS:
Active pressure quickly swept through lean hog futures trade following the strong market rally over the last couple of weeks. The October contract is leading the complex lower, down $2.85 per cwt, although recent gains in the complex are minimizing the long-term or technical pressure in the complex. The potential that gains last week may have set a short-term top to the market could allow traders to establish a moderate-to-wide sideways trading range through the end of July and early August. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $1.94 higher at $80.03 per cwt with the range from $72 to $88 on 6,215 head reported sold. Pork values eroded in early week trade. Pork cutouts fell $1.10 per cwt at $83.28 per cwt with 114 loads traded. Lean hog index for 7/25 is $78.86, up $1.63, with a projected two-day index is $80.36, up $1.50.
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