DTN Midday Livestock Comments 08/18 11:54
Cattle Futures Draw Buyer Support Midday Friday
Firm gains have developed in feeder cattle trade midday Friday. This has
helped to draw additional support back into the live cattle complex focused on
end-of-week short covering. Hog futures remain under firm pressure, based on
By Rick Kment
Cattle futures have quickly backed away from early market pressure with
markets mixed to moderately higher at midday. The buyer support is based more
on short covering activity at the end of the week rather than any longer term
change of direction. Hog futures remain stuck in the lower trend due to
extremely light volume. Corn prices are higher in light trade. September corn
futures are 2 cents higher. Stock markets are higher in light trade. The Dow
Jones is 23 points lower while Nasdaq is up 30 points.
Mixed trade is seen in live cattle futures with prices stuck in a narrow
trading range. Buyers have stepped back into the complex based on short
covering activity in front of the weekend, and not based on a change in market
direction. This could help to bring some needed market stability back to the
complex, but for now, it appears that most traders are focusing on weaker
fundamentals still driving the future movement of the complex. Cash cattle
market activity remains quiet with a few live bids developing in Nebraska at
$109 per cwt. The light to moderate trade seen Thursday is expected to be
enough to cover packer's needs at this point. Sales for the week have settled
at $110 in the South and generally $175 in the North. Beef cut-outs at midday
are lower, $1.70 lower (select) and down $0.57 per cwt (choice) with active
movement of 80 total loads reported (56 loads of choice cuts, 8 loads of select
cuts, no loads of trimmings, 16 loads of ground beef).
Moderate buyer support has moved into the feeder cattle futures late morning
Friday following strong early pressure which continued the downward market
trend across the complex. There is expected to be some additional follow
through support based on the short-covering activity that is now developing.
Even though the overall tone of the cattle market remains extremely weak, the
push higher in feeder cattle market has posted gains of 10 to 80 cents per cwt.
Most traders are squaring positions in front of the weekend, rather than
focusing on any changing direction in the market.
Narrow market movement has been seen through the entire morning in lean hog
futures trade with front month October holding a $1.10 loss as traders remain
focused on the lack of cash market support and bearish movement through the
cattle market. Even though pork values bounced higher at midday, the inability
to draw additional buyer support back into the market at the end of the week
will likely create even more pressure through the complex. Cash prices are
lower on the National Direct morning cash hog report. The weighted average
price fell $2.25 at $73.15 per cwt with the range from $69.00 to $75.00 on
3,197 head reported sold. Cash prices are unreported due to confidentiality on
the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant
Report reported 143 loads selling with prices adding $1.06 per cwt. Lean hog
index for 8/16 is at $87.70 down $0.33 with a projected two-day index of
$83.19, down $0.51.
Rick Kment can be reached at firstname.lastname@example.org
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