GENERAL COMMENTS:
Despite holding relatively steady early in the session, nearby live cattle and feeder cattle futures have started to break under the pressure from lean hog futures and concerns that additional grain market support will add even more production costs to livestock trade over the near future. December corn is up 9 cents per bushel and December soybean meal is up $3.60 per ton. The Dow Jones Industrial Average is up 190 points.
LIVE CATTLE:
October live cattle are trading down $0.52 at $128.45, following a strong rally in grain markets, especially corn prices, which added concerns about further production costs. Aggressive spillover pressure from the hog market, which is holding limit losses at midday, is creating some nervousness through the complex as traders look for direction from not only outside markets, but hopefully cash prices will continue to gain strength through the end of the week. Cash trade started to slowly develop Wednesday with prices generally steady to $1 per higher in the South and most trades at $197 to $198 per cwt. Northern trade is seen at mostly $121 to $122 per cwt, $1 to $2 per cwt above last week's weighted average. Bids are still undeveloped through the morning, but more interest is likely to be seen in the next few hours; however, additional trade may hold out until sometime Friday.
Thursday morning's boxed beef prices are higher with choice cuts up $2.68 at $292.02 and selects up $1.73 at $272.88 on a total count of 62 loads. Dow Jones estimated Thursday's cattle slaughter at 121,000, up from 119,000 a week ago.
FEEDER CATTLE:
September feeders are trading down $0.52 at $162.30, following the rebound in December corn futures. This continues to add increased price levels for feeders, offsetting the buyer support which developed across the entire feeder cattle market at midweek. Feeder cattle prices continue to trade at the top end of the range seen over the last five years. This could continue to spark underlying support by feedlot buyers as continued placement tightness is expected not only over the upcoming weeks but may continue through much of 2022. The CME Feeder Index was priced at $155.97 for August 3.
LEAN HOGS:
Lean hog futures tumbled lower Thursday morning as widespread concerns of further pressure in pork cutout values led to increased selling volume. October and December contracts are holding limit losses of $3 per cwt at midday. August futures are trading 80 cents lower, with prices still above $108 per cwt. With August contract expiration just over a week away, and contracts cash settled to the CME Lean Hog Index, the relationship between August futures and cash prices remains closely tied. If December contracts break below $80 per cwt in Friday trade, further liquidation is likely as traders may continue to remain concerned about short-term stability in the entire complex. Thursday morning's weekly export report posted net sales of 38,800 metric tons (mt) reported for 2021 were up 1% from the previous week and 32% from the prior four-week average. Increases primarily for China (18,300 mt, including decreases of 200 mt, Mexico (9,200 mt, including decreases of 1,100 mt), Japan (3,300 mt, including decreases of 500 mt), South Korea (3,100 mt, including decreases of 300 mt), and Canada (1,600 mt, including decreases of 400 mt), were offset by reductions for Nicaragua (200 mt) and Chile (100 mt). Exports of 28,400 mt were down 5% from the previous week and 2% from the prior four-week average. The destinations were primarily to Mexico (12,100 mt), China (4,900 mt), Japan (4,000 mt), Canada (1,900 mt), and South Korea (1,300 mt). Cutouts are unreported Thursday morning due to packer submission problems, creating delays in price reporting. Negotiated hog prices are also unreported due to packer submission problems on the National Direct Morning Hog Report. Dow Jones estimated Thursday's hog slaughter at 472,000, up from 470,000 a week ago. The CME Lean Hog Index is estimated at $111.78 for Aug. 3.
No comments:
Post a Comment