Thursday, August 15, 2019

Thursday Closing Livestock Market Summary - Livestock Futures Close Mixed

GENERAL COMMENTS:
Livestock futures were unable to hold on to strong gains seen early Thursday. By closing bell, live cattle futures closed mixed, while lean hog futures eroded in last-minute trade. The cattle complex continues to remain oversold, but most traders are staying on the sidelines following the wide swings over the last week. Cash cattle trade remains quiet following light-to-moderate trade in the South on Wednesday at $105 per cwt. This is generally $5 per cwt lower than last week's levels. A few scattered bids are seen through the day at $105 live in the South and $170 per cwt dressed in the North. It appears that any additional trade will hold out until Friday. It is uncertain whether feeders will unload cattle at current bids or be willing to carry larger showlists into next week. Most asking prices are seen at $107 and higher in the South and $175 in the North. The National Daily Direct afternoon hog report was $1.08 lower ($61 to $73.75, weighted average $71.25) on 9,786 head sold. Corn futures bounced higher in limited late-day buying with September up 1 3/4 cents. Stock markets are mixed in light trade with the Dow is 67 points higher and the NASDAQ down 6 points.

LIVE CATTLE: Futures closed $0.27 lower to $0.65 higher. Nearby live cattle futures remain stuck in a narrowly mixed trading range. The October futures contract inched 2 cents higher. Prices stabilized at the end of the session, but traders continue to focus on the inability to push prices back above $100 per cwt. Although trade was less bearish over the last two sessions, concern remains that the weak market structure will limit significant market moves over the near future. Trade volume Friday is expected to remain limited as traders will likely focus on position-squaring following the wild price swings during the week, rather than on establishing long-term market direction. Beef cut-outs: higher, up $4.75 (select, $210.67) to up $3.78 (choice, $236.12) with good demand and light offerings, 79 loads (35 loads of choice cuts, 17 loads of select cuts, 7 loads of trimmings, 19 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: Steady with midweek trade. Any additional end-of-the-week trade has been pushed into Friday following limited interest from both sides Thursday. Following light-to-moderate trade in the South Wednesday at $105 per cwt, the tone of the market is set to be lower, but aggressive gains in wholesale beef values may limit the downside market pressure. It is likely that additional trade will be needed in most areas before the end of the week, but it is uncertain how willing feeders will sell into the lower market structure, versus holding onto cattle and adding them to next week's showlists.

FEEDER CATTLE: Futures closed mixed, $0.10 lower to $1.30 higher. Initial sharp gains faded the last two hours of trade. Uncertainty remains as to just how much impact the fire at Tyson's Kansas plant will have on overall slaughter numbers in the short and long term. This will likely keep trade volatile and prices moving in moderate-to-wide ranges over the next several weeks. Traders are also expected to square positions over the next couple of days. CME cash feeder index for 8/14 is unavailable at this time.

LEAN HOGS: Futures closed $0.15 to 1.77 lower. Late-day pressure developed in lean hog trade on a lack of support in the front-month October futures contract, which closed at $65 per cwt. Although nearby contracts continue to hold above long-term support, the inability to bring consistent fundamental support to the complex is keeping the entire complex generally bearish. Due to continued trade concerns with China, traders looked past increased sales to China in Thursday's export sales report. The lack of gains in pork cutout values has sparked increased weakness through the entire complex. Pork cutout values continue to slowly erode despite narrowly mixed moves in primal cuts. Pork cutout values fell $0.67 per cwt, moving to $88.23 per cwt on 253 loads. CME cash lean index for 8/13 is $79.86, down $1.09. DTN Projected lean index for 8/14 is $79.34, down $0.52.


FRIDAY'S CASH HOG CALL: Steady to $1 lower. End-of-the-week activity is expected to limit market direction through the end of the week with traders looking for steady to weak price levels Friday. Friday slaughter numbers are expected at 464,000 head. Saturday runs are expected at 141,000 head.


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