DTN Midday Livestock Comments 05/05 11:46
Cattle Futures Turn Lower During Midday Trade
Strong losses which have developed in nearby feeder cattle futures have
quickly impacted previous support through live cattle trade. This has helped to
push prices lower across cattle futures with the concern that longer term
support may be starting to be limited.
By Rick Kment
Early support seen through the entire livestock market has narrowed
significantly as cattle futures have turned lower during late morning trade.
The focus on firming cash hog markets and strong demand support is keeping
nearby lean hog futures higher, while the entire cattle complex has slipped
lower, looking for renewed direction. Corn prices are lower in light trade. May
corn futures are 2 cents per bushel lower. Stock markets are lower in light
trade. The Dow Jones is 58 points lower while Nasdaq is down 54 points.
Light to moderate pressure has trickled into the live cattle complex as
traders quickly back away from the feeder cattle market and very little
additional support was seen through beef values. Even with the lower prices, it
is expected that nearby summer contracts may continue to remain stuck in the
current rut, between $149 and $151 per cwt as traders look for additional
demand support which may help to draw buyers back into the complex. Cash
markets remain quiet with bids still undeveloped. It is expected that at least
token bids may develop through midweek, although active trade may be delayed
until late in the week. Beef cut-outs at midday are higher, $0.36 higher
(select) and up $1.33 per cwt (choice) with light movement of 98 total loads
reported (39 loads of choice cuts, 34 loads of select cuts, 7 loads of
trimmings, 18 load of ground beef).
What started out as strong morning buyer support has steadily eroded through
the session as traders are now looking at moderate to strong losses near
midday. The overall lack of new market information seems to have allowed
traders to once again focus on the lack of follow through strength in cash and
beef values, as well as inability of live cattle futures to break out of the
current price range around $150 per cwt. This could add additional late day
pressure through the entire feeder cattle complex, although the overall tone of
the market may take more time to change significantly.
Moderate to strong gains continue to hold in nearby contracts, with the
strongest price support seen in the extremely lightly traded May contract which
is holding a $2 per cwt rally. The few traders who are in the May contract
month are trying to catch up to the support seen over the last few sessions in
other summer contract. June through August futures are holding between $82 and
$83 per cwt based on recent cash market support, as buyers continue to steadily
step into the complex. Cash prices are lower on the National Direct morning
cash hog report. The weighted average price fell $0.80 per cwt to $73.24 per
cwt with the range from $64.00 to $76.00 per cwt on 3,973 head reported sold.
Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The
weighted average price added $0.17 per cwt to $75.57 per cwt with the range
from $67.50 to $76.00 per cwt on 872 head reported sold. The National Pork
Plant Report is reported 186 loads selling as prices added $0.61 per cwt. Lean
hog index for 4/30 is at $69.49 up 1.33, with a projected two-day index of
$71.17 up 1.68.
Rick Kment can be reached at email@example.com
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