DTN Midday Livestock Comments 02/20 12:09
Sharp Hog Gains Holding at Midday
Lean hog futures have posted a strong rally early Tuesday morning as traders
try to adjust to the recent market lows set last week. Cattle markets are mixed
in light trade as sluggish volume is likely to be seen through the rest of the
By Rick Kment
Cattle futures remain focused on long-term direction through the complex
with firming support seen in feeder cattle markets during late morning. Hog
futures are bouncing higher with triple-digit gains holding in most contracts.
Corn prices are mixed in light trade. March corn futures are steady Tuesday.
Stock markets are mixed in light trade. The Dow Jones is 97 points lower while
Nasdaq is up 52 points.
Narrow trading ranges have continued to develop Tuesday morning as traders
trickle back into the market from the long weekend. Nearby contracts are
holding narrow gains, but this being offset by narrow losses in deferred
contracts. There is growing stability in beef values, but it is uncertain if
this will translate to increased buyer support in the nearby futures trade
during the week. Cash cattle activity remains undeveloped through the complex
with bids and asking prices are still undeveloped. It may be the second half of
the week before any significant developments are seen in the market. There are
also some expectations that the strong rally last week will significantly
increase asking prices and firm feedlot manager resolve. Boxed beef cut-outs at
midday are higher, $3.07 higher (select) and up $3.20 per cwt (choice) with
light movement of 69 total loads reported (38 loads of choice cuts, 12 loads of
select cuts, 7 loads of trimmings, 11 loads of ground beef).
Narrow trading ranges seen early in the session have widened as traders seem
to have gained increased momentum following strong gains in boxed beef values.
This has pushed front month March futures 90 cents per cwt higher as traders
continue to focus on long term market support in all nearby contracts.
Strong gains have flooded into the lean hog futures complex. This is helping
to sustain triple-digit gains in all markets. Additional support is likely to
be seen through all the markets during the rest of the trading session with
traders trying to take advantage of the aggressive losses seen last week. Cash
prices are lower on the National Direct morning cash hog report. The weighted
average price is down $0.26 at $64.18 per cwt with the range from $63.00 to
$64.50 on 6,339 head reported sold. Cash prices are lower on the Iowa/Minnesota
Direct morning cash hog report. The weighted average price is down $0.30 at
$64.29 per cwt with the range from $63.50 to $64.50 on 2,537 head reported
sold. The National Pork Plant Report posted 241 loads selling with carcass
values adding $1.62 per cwt. Lean hog index for 2/16 is at $72.09, down 0.80
with a projected two-day index of $71.41, down 0.68.
Rick Kment can be reached at email@example.com
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