DTN Midday Livestock Comments 11/14 12:09
Moderate Losses Hold in Cattle Futures
Pressure is seen in most cattle trade early Wednesday as traders try to
adjust to the sharp market shifts seen earlier in the week. Trade volume is
expected to remain light to moderate through the rest of the complex, allowing
for limited direction over the next couple of days.
By Rick Kment
Moderate pressure has developed through livestock futures as cattle markets
have shifted lower late morning. The move is being led by live cattle futures,
focusing on the pullback in feeder cattle trade. Corn markets are lower in
light to moderate trade. December corn futures are 1/4 cent lower. Stock
markets are lower in light trade. The Dow Jones is 163 points lower while
Nasdaq is down 50 points.
Firm pressure in feeder cattle futures is adding to the overall lack of
support in live cattle markets. Front month December futures are holding an 82
cent per cwt loss, while the rest of the complex remains contained in a
narrowly mixed range. Prices continue to test short term lows, in several
nearby contracts, but the wide sideways trend seen in long term activity is
expected to continue and allow prices to shift higher and lower within a
moderate pattern over the next several weeks. Cash cattle interest is slowly
trickling into the market with a few dressed bids in the North from $175 to
$176 per cwt. Asking prices remain extremely hard to pin down with not enough
seen to establish a sense of feeders interests. It is likely that both sides
will become more vocal through the end of the day, although at this point it is
likely that trade will not develop until late in the week. Boxed Beef cut-outs
at midday are lower, $0.63 lower (select) and down $0.48 per cwt (choice) with
moderate movement of 88 total loads reported (56 loads of choice cuts, 16 loads
of select cuts, no loads of trimmings, 15 loads of ground beef).
Moderate losses are seen at midday following back and forth market shifts
through the morning. Nearby contracts are showing a 2 cent loss in the lightly
traded November contract, although prices through the rest of the complex are
trading 25 to 70 cents lower. Most of the morning pressure has little to do
with the direction of markets or fundamental shifts, but more focused on market
corrections following the aggressive and potentially overstated gains seen in
late trade Tuesday. Light activity is expected to be seen through the rest of
the session, with limited activity seen across the complex.
Limited activity is seen through the entire lean hog futures complex with
nearby gains seen 10 to 45 cents per cwt higher. The overall lack of aggressive
follow through support is not surprised given the back and forth market shifts
through the entire week. Deferred contracts are holding light to moderate
losses with limited additional direction seen across the complex. December
through April contracts, which are posting gains, are the same market contracts
that developed late day support Tuesday, indicating follow through commercial
support in nearby contracts as traders focus on the ability to hold cash
markets higher in morning reports. Cash prices are higher on the National
Direct morning cash hog report. The weighted average price is $0.31 higher at
$51.86 per cwt with the range from $46.00 to $52.44 on 5,771 head reported
sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog
report. The weighted average price is $1.56 higher at $51.70 per cwt with the
range from $48.00 to $52.00 on 1,354 head reported sold. The National Pork
Plant Report posted 223 loads selling on the morning report. Pork carcass
values fell $1.00 per cwt at $69.69 per cwt. Lean hog index for 11/12 is
$61.20, down 0.67, with a projected two-day index of $60.47, down 0.73.
Rick Kment can be reached at firstname.lastname@example.org
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