DTN Midday Livestock Comments 12/08 12:13
Hog Market Rally Continues Thursday
Triple-digit gains have continued to develop through the lean hog futures
complex. This may spark additional long term support through the market. Cattle
trade remains slightly lower, but well above session lows.
By Rick Kment
DTN Livestock Analyst
Strong lean hog futures support continues to build with December contracts
nearing $2 per cwt gains while February futures are holding a $2.60 rally at
midday. Cattle futures have pulled back from strong morning losses. Corn prices
are lower light trade. December corn futures are 6 cents lower. Stock markets
are higher in light trade. The Dow Jones is 88 points higher while Nasdaq is up
Live cattle futures are trading mixed in a narrow range at midday. The lack
of downward pressure continuing through the market may help to spark some end
of the week support. But for now, it seems the market remains to look toward
directionless moves seen in previous trading sessions. Cash cattle activity is
starting to develop with trade seen in the North at $169 to $170 per cwt. This
is $5 to $6 per cwt lower than last week, and may set the tone for the entire
market. Bids are seen in the South at $110 per cwt. Asking prices remain at
$115 in the South and $176 in the North. Beef cut-outs at midday are higher
$0.02 (select) and up $0.91 per cwt (choice) with moderate movement of 86 total
loads reported (50 loads of choice cuts, 22 loads of select cuts, 2 loads of
trimmings, 11 loads of ground beef).
Feeder cattle futures continue to move back from the sharp triple digit
losses following the lack of trade direction through morning. Nearby contracts
are trading 20 to 50 cents lower with light pressure seen through the market.
The ability to move contract higher at the end of the way would be considered a
moral victory for the cattle market, which posted strong triple-digit losses
early in the session.
Strong follow-through gains continue to develop through the Thursday
session. There is expected to be some additional underlying support through the
market. Increased trade continues to develop following the firm gains in cash
markets. The support is likely to help bring long term buying activity back
into the market. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price gained $0.33 at $51.95 per cwt with the
range from $45.00 to $54.00 on 6,295 head reported sold. Cash prices are higher
on the Iowa Minnesota Direct morning cash hog report. The weighted average
price added $0.44 per cwt to $52.47 per cwt with the range from $45.00 to
$54.00 on 2,291 head reported sold. The National Pork Plant Report reported 168
loads selling with prices falling $0.36 per cwt. Lean hog index for 12/6 is at
$51.95 up $0.92 with a projected two-day index of $53.17 up $1.22.
Rick Kment can be reached at firstname.lastname@example.org
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