DTN Midday Livestock Comments 05/20 12:12
Feeder Cattle Lead Cattle Market Lower
Strong underlying pressure is moving through the entire cattle complex as
traders back away from last week's gains. Firm pressure developed through live
cattle trade, with hog markets unable to hold early gains.
By Rick Kment
Firm pressure moving through feeder cattle trade Monday morning has sparked
additional selling interest in live cattle trade. Lean hog futures have given
back early buyer interest, with prices mixed in a narrow to moderate range.
Corn futures are higher in active trade. July corn futures are 7 cents higher.
Stock markets are lower in light trade. Dow Jones is 56 points lower with
Nasdaq down 45 points.
Limited selling interest continues to hold live cattle trade lower late
Monday morning with June futures holding a 20 cent loss. The lack of aggressive
selling contracts despite strong gains in corn futures and triple-digit
pressure in feeder cattle futures has helped to spark additional stability
through nearby live cattle trade. Long-term demand continues to develop through
the entire cattle complex traders focus on the ability to increase domestic and
global beef demand through the next couple of months. Cash cattle interest
remains sluggish Monday with bids and asking prices still undeveloped.
Increased interest may start to develop midweek, although trade may not develop
until midweek or later. Boxed Beef cut-outs at midday are unreported at this
Firm underlying pressure has moved through the entire complex as
triple-digit losses are holding through the entire complex. Additional buyer
support sweeping through corn and soybean markets Monday morning has added
increased pressure to feeder cattle trade. August through January futures are
holding $1.25 to $1.40 per cwt losses with increased overall weakness
developing in all cattle trade. It is expected that limited market activity
will develop through the end of the session, although prices are likely to hold
in the current weaker pattern.
Lean hog futures are mixed to mostly lower midday following the inability to
hold strong early gains. June futures are leading the complex lower with $1.15
per cwt losses as traders adjust price levels following last week's market
rally. The inability to sustain initial gains helped to bring additional
selling activity into nearby and deferred contracts. There is expected to be
some additional market shifts as traders balance between firm domestic demand
and uncertainty of overall global economic growth. Recent news report, not only
focusing on the increased demand for global pork supplies, but focusing on
potential increased meat prices to consumers is starting to limit previous
bullish market support seen last week. Cash prices are lower on the National
Direct morning cash hog report. The weighted average price is down $0.96 at
$80.19 per cwt with the range from $72.50 to $80.19 on 5,363 head reported
sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota
Direct morning cash hog report. Pork values surged higher with strong gains in
most primal cuts. Pork cutouts added $3.82 per cwt at $89.09 per cwt with 105
loads traded. Lean hog index for 5/16 is $84.59 up 0.39, with a projected
two-day index is unchanged.
Rick Kment can be reached at email@example.com
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