GENERAL COMMENTS:
The cattle contracts are trending lower as the market absorbs Friday's bearish Cattle on Feed report. The lean hog complex has finally found some support and it's pushing its contracts higher. Monday afternoon, the monthly Cold Storage report will be released. December corn is up 5 3/4 cents per bushel and December soybean meal is up $13.30. The Dow Jones Industrial Average is down 484.46 points.
LIVE CATTLE:
The live cattle market is sluggishly making its way toward the noon hour as the market longs for technical support after Friday's bearish (but expected) Cattle on Feed report. August live cattle are down $0.25 at $141.35, October live cattle are down $0.85 at $144.40 and December live cattle are down $0.67 at $150.30. A couple of plants are rumored to be dark on Saturday, which could hinder packers' need of supporting the cash cattle market as aggressively as they have in the last couple of weeks. Nevertheless, once the holiday shortened Labor Day week is behind the market and things go back to a normal schedule, packers will likely be aggressive again in the marketplace as thin supplies and aggressive throughput pushes cattle throughout the market more aggressively than expected.
Last week Southern live cattle traded at mostly $142, which is $2.00 higher than last week's weighted average, and Northern dressed cattle sold for mostly $234, which is $4.00 higher than last week's weighted average.
Last week's negotiated cash cattle trade totaled 101,555 head. Of that, 69% (70,495 head) were committed to the nearby delivery, while the remaining 31% (31,060 head) were committed for the deferred delivery.
Boxed beef prices are higher: choice up $1.90 ($266.18) and select up $2.39 ($240.33) with a movement of 37 loads (17.96 loads of choice, 5.79 loads of select, 8.59 loads of trim and 5.11 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market is drifting lower as the market absorb Friday's Cattle on Feed report. The market has flirted with the idea of trading higher and forgetting all about Friday's report, but, with the corn market pushing a $0.03 to $0.05 rally, the market is skeptical of running into Monday's market with too much vigor. It was noticeable in last week's sale receipts that ranchers are beginning to send their calves to town and that the fall run is starting earlier this year as ranchers try to combat drought related stressors again. August feeders are steady at $181.50, September feeders are down $0.75 at $184.00 and October feeders are down $0.62 at $186.15.
LEAN HOGS:
After last week's tumultuous descend, the lean hog complex has found some support in Monday's market. Now the big question that remains is: Is this the bottom of the move or will the market see more pressure?
Cash prices are expected to be higher again this week as market ready supplies of hogs are still desperately thin. October lean hogs are up $1.82 at $94.95, December lean hogs are up $0.77 at $84.95 and February lean hogs are up $0.80 at $87.82. If pork cutout values can continue to show support, then the futures market may keep its elevated tone and packers may be willing to keep processing speeds at least steady.
The projected lean hog index for Aug. 19 is down $0.31 at $119.98, and the actual index for Aug. 18 is down $0.31 at $120.29. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.66 with a weighted average of $121.01, ranging from $112.00 to $135.00 on 4,773 head and a five-day rolling average of $123.84. Pork cutouts total 181.61 loads with 140.69 loads of pork cuts and 40.92 loads of trim. Pork cutout values: up $3.86, $121.01.
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