GENERAL COMMENTS:
Initial trade the first day of November is showing positive market support, but there is nothing earth-shattering developing in the markets as traders are starting to become accustomed to a more stable, status quo market movement and direction following the wild ride seen in all markets over the last month. Feeder cattle futures continue to lead the market higher Wednesday morning with technical support testing the waters and expectations that light to moderate fundamental market support may redevelop during the upcoming weeks. Deferred live cattle contracts are showing the most price movement Wednesday based on long term supply issues, while nearby live cattle contracts are content holding narrow gains. The lean hog futures complex remains essentially dead in the water with no sign of active directional shifts or significant market volume developing midweek. December corn is down 3 1/4 at $4.755 and December soybean meal is down $2.50 at $428.5. The Dow Jones Industrial Average is up 102.59 at 33,155.46.
LIVE CATTLE :
Prices have shifted higher in live cattle futures trade Wednesday morning, although limited support is seen in nearby contracts. The softness in corn prices and firming nearby feeder cattle futures has the most impact in summer and fall live cattle contracts as traders try to adjust higher placement costs into the futures market. Trade remains generally sluggish and without a significant outside market shift, most of Wednesday's activity is likely to remain sluggish. Cash cattle markets have seen another slow start with very little direction yet to develop. Bids remain very quiet, while asking prices are slow to surface, but the few that are seen are at $188 in the South. The underlying support in futures trade and generally stable market conditions is expected to cause feeders to become more bullish through the week. It is uncertain if active cash trade will develop midweek, or if it will become a late week affair this week. December live cattle are $0.10 higher at $183.65, February live cattle are $0.33 higher at $184.95, April live cattle are $0.63 higher at $187.30.
Boxed beef prices are lower: choice down $2.51 ($302.67) and select down $0.76 ($278.74) with a movement of 96.00 loads (44.62 loads of choice, 18.94 loads of select, 9.57 loads of trim and 22.89 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have rallied higher Wednesday morning with spot November contracts leading nearby contracts higher with gains nearing $1 per cwt. The ability to string together continuous days of gains is not only helping to firm price levels, but is starting to draw additional trade interest with the focus on rebuilding buyer support through the upcoming weeks. Although there remains some uncertainty of future cattle placement numbers and overall supply levels, traders are reverting back to the information available on a daily basis and are becoming less bearish every day. It is uncertain if price levels or buyer interest will move back to levels seen in September, but for now, many are expecting seasonal lows have been set. This could allow for additional firm price gains to develop over the next couple of weeks. Cash feeder cattle prices in the USDA National Feeder Cattle Summary fell $1 to $16 per cwt lower from the previous week. The wide range of price levels focused on regional areas as well as local demand and quality of cattle available. Combined with the sharp losses in futures trade, market variability was not unexpected. Winter weather conditions in some areas added to the market shifts as cattle and buyer movements were limited in some areas. November feeders are $0.95 higher at $238.65, January feeders are $0.60 higher at $237.8 and March feeders are $0.50 higher at $240.25.
LEAN HOGS:
The overall message developing in lean hog futures appears to be summed up by "steady but stable growth" as narrow gains hold in lean hog futures as limited but supporting buying support has moved back into the complex. Even though overall hog and pork movement remained light Wednesday morning, the mixed price direction is not shaking the ability for buyers to slowly step back into the lean hog complex. After posting shar losses during most of October, and setting contract lows last week, traders continue to be back in a rebuilding and recovery mode when it comes to both short and long-term price movements. Trade volume and price movements are expected to remain limited through the end of the session with some additional stability likely the best thing that can be seen to help support prices through the end of the year. December lean hogs are $0.03 higher at $71.75, February lean hogs are $0.05 higher at $74.925 and April lean hogs are $0.18 higher at $80.375.
Hog Prices are higher on the Daily Direct Morning Hog report, up $0.49 with a weighted average of $70.43, ranging from $66 to $72 on 2,725 head with a five-day rolling average of $70.54. Pork Cutouts totaled 189.90 loads with 172.96 loads of pork cuts and 16.94 loads of trim. Pork cutout values are down $1.74 at $86.48.
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