GENERAL COMMENTS:
Following the long holiday weekend break and last Friday's report frensy for both cattle and hog markets, traders are looking at mixed market direction early in the week. Initial morning trade posted moderate to firm pressure as traders viewed last week's cattle on feed and hogs and pigs reports neutral to slightly bearish, but the underlying softness in the cattle market was overseen by light to moderate buying with the focus that most of this pressure was already factored into market prices last week.
Hog futures have continued to show market weakness through the morning with the most aggressive pressure seen in February and April contracts, trading $1 to $2 per cwt lower through morning trade. Light volume is seen following the Christmas break, and this is expected to continue through the rest of the week with limited market activity typically seen between the Christmas and New Year's holiday each year.
March corn is up 5 1/4 at $4.783 and March soybean meal is up $0.50 at $391.6. The Dow Jones Industrial Average is up 125.12 at 37,511.09.
LIVE CATTLE:
Live cattle futures have led the cattle market higher Tuesday morning following the three-day weekend. February futures are posting the most significant gains at midday or $1.12 per cwt, while the underlying support through the complex remains generally firm despite the limited trade activity. Limited trade direction changes were seen following last Friday's cattle on feed report, which posted overall cattle on feed numbers in December slightly above pre-reported estimates. But the overall market shifts seen last week seemed to have adequately adjusted for these increases, allowing traders to once again focus on the potential of growing demand support through the first two quarters of 2024.
Light volume is expected to be seen through the entire week, which always has the opportunity to bring about moderate to wide price swings with very little fundamental justification. But the ability to create market stability and light to moderate price gains through the end of the year should help bring about additional buyer interest into the entire complex.
Cash cattle activity remains quiet Tuesday morning as packers and feeders have a late start to the week due to the Christmas holiday. The cash price support seen last week should help to bolster asking prices, but it is likely that any significant interest may not be seen until midweek or later.
December live cattle are $0.25 higher at $170.3, February live cattle are $1.13 higher at $169.65, April live cattle are $0.93 higher at $173.05.
Boxed beef prices are lower: choice down $0.48 ($292.45) and select down $0.45 ($260.70) with a movement of 36.32 loads (21.62 loads of choice, 6.74 loads of select, 4.10 loads of trim and 3.86 loads of ground beef).
FEEDER CATTLE:
Feeder cattle trade started out under pressure Tuesday morning as the lightly traded feeder cattle complex took the brunt of the cattle on feed report news and held light to moderate price pressure through much of the morning. At midday, the softness in the complex has been shaken off with most contracts holding light to moderate gains. Even though placement numbers slid from previous month and year ago levels, the totals still came in higher than expected, which created some uncertainty about current and future supply levels available for the market through the last half of 2024.
Prices may continue to wander in a narrow to moderate range through the rest of the session, with limited trade volume likely to add volatility to the market not only Tuesday, but the rest of the week.
January feeders are $0.28 higher at $223.025, March feeders are $0.25 lower at $224.15 and April feeders are $0.13 higher at $229.65.
LEAN HOGS:
Lean hog futures have moved lower Tuesday morning following the long weekend break and Friday's quarterly hogs and pigs report. Total hog numbers are fractionally changed from year-ago levels, but slightly above pre-report estimates. The expectation by the market that the hog herd has contracted more than it has over the last three months is adding even more concern to market prices, and may limit additional buyer support across the entire complex.
February and April futures are showing the most aggressive pressure, falling $1 to $2 per cwt as traders try to adjust to the current supply levels combined with lackluster growth support in demand and pork prices through the end of the year.
February lean hogs are $2.10 lower at $69.25, April lean hogs are $1.48 lower at $76.1 and May lean hogs are $1.15 lower at $82.80. Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 113.52 loads with 103.22 loads of pork cuts and 10.30 loads of trim. Pork cutout values are down $0.07 at $80.58.
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