GENERAL COMMENTS:
Cattle futures have worked lower once again Tuesday morning with early week technical pressure leading into a more focused price shift lower that is starting to create concern of breaking through support levels seen during late October. Spot live cattle contracts seem to have limited selling pressure, but the majority of market softness is developing in early 2024 contract months. Feeder cattle weakness is seen through the entire complex with traders looking past any pressure in grain markets and lower feed costs and creating concern that momentum in all cattle trade may remain under pressure in the near future. Hog futures have gained a combination of light technical support as well as firm fundamental buying interest. This is not creating aggressive gains, but is helping to build market momentum as prices further distance themselves from recent contract lows. December corn is down 5 3/4 at $4.715 and December soybean meal is up $16.70 at $454.2. The Dow Jones Industrial Average is up 34.35 at 34,130.21.
LIVE CATTLE :
Live cattle futures have posted additional losses Tuesday morning with most contracts holding triple-digit losses. Spot December contracts are the most stable contract, falling 35 cents per cwt. This is able to hold prices well below October lows. The rest of the live cattle market is posting triple-digit losses, creating not only concerns of further liquidation, but testing and, in some cases, breaking through chart support.
February futures are trading just 30 cents above Oct. 26 lows. A close below these recent market lows would likely trigger additional selling pressure across most live cattle contracts.
Cash cattle markets remain at a standstill with asking prices and bids still undeveloped.
Given the pressure in futures trade, there is expected to be very little additional direction in the cash cattle market through Tuesday. The lower cattle sales last week would indicate that packers need to secure additional numbers, but more than likely any significant business done will be pushed off until the last half of the week. December live cattle are $0.38 lower at $180.95, February live cattle are $1.35 lower at $180.625, April live cattle are $1.48 lower at $183.125.
Boxed beef prices are higher: choice up $0.69 ($302.41) and select up $0.36 ($270.72) with a movement of 86.70 loads (44.22 loads of choice, 13.77 loads of select, 14.22 loads of trim and 14.49 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures continued to show pressure Tuesday morning with increased concern that trades may be willing and able to give back all of the market gains seen over the couple of weeks. Even though corn markets are lower and reducing overall feeding costs, the active pressure in live cattle futures are the main driver of follow through selling pressure across the entire complex. November feeders are $0.98 lower at $236.2, January feeders are $1.38 lower at $235.05 and March feeders are $1.28 lower at $237.825.
LEAN HOGS:
Moderate gains are redeveloping and holding across the lean hog futures complex Tuesday morning. For the second day in a row, hog futures have not been negatively affected by the downward shift in cattle trade as traders are focused on potential fundamental support building in the pork and hog markets as well as limited but evident technical support redeveloping across the market. December lean hogs are $0.58 higher at $72.975, February lean hogs are $0.48 higher at $76.425 and April lean hogs are $0.33 higher at $81.575.
Hog Prices are higher on the Daily Direct Morning Hog report, up $1.84 with a weighted average of $68.78, ranging from $63 to $71 on 3,739 head with a five-day rolling average of $69.27. Pork Cutouts totaled 178.44 loads with 157.46 loads of pork cuts and 20.98 loads of trim. Pork cutout values are up $9.99 at $95.40.
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