DTN Midday Livestock Comments 08/23 12:03
Nearby Hog Futures Slip Lower Midday
Early support in the lean hog futures complex was quickly dashed as prices
have moved from moderate gains to strong losses. Lack of fundamental support in
all livestock markets is limiting trade volume through most of the complex.
By Rick Kment
Moderate to widespread losses are seen through the livestock market late
Tuesday morning. Early support in lean hog futures has quickly eroded, opening
the door for additional strong losses as markets are showing triple-digit
losses in a couple contracts. Corn prices are lower in light trade. September
corn futures are 3 cents lower. Stock markets are higher in light trade. The
Dow Jones is 36 points higher while Nasdaq is up 19 points.
Deferred live cattle futures appear to be in the driver's seat early Tuesday
with moderate to strong losses seen in 2017 contract months. The focus has
moved quickly away from current beef supplies and the ability to move product
in retail outlets, to the long-term market uncertainty of sustaining meat
demand over the next several months. Contract in late 2017 are trading below
$103 per cwt, which creates significant concern about the ability to draw
widespread support into the complex long term. Cash cattle markets are showing
a bit of life early Tuesday with a few bids seen in the South at $115 per cwt.
At this point it appears that current bids are well below asking prices of $120
and higher, and also last week's trade. But given that packers are starting out
earlier than usual, could indicate they will be more aggressive through the
week. Bids are undeveloped in the North, while asking prices are expected to be
at $190 and higher. Beef cut-outs at midday are mixed $0.36 higher (select) and
down $0.57 per cwt (choice) with light movement of 76 total loads reported (46
loads of choice cuts, 15 loads of select cuts, 5 loads of trimmings, 10 loads
of ground beef).
Feeder cattle futures continue to erode slowly through the morning with very
little additional market support seen across the market. Even the pressure in
corn markets Tuesday has been unable to spark any additional interest to
venture into the market. This could keep prices sluggish through most of the
session as moderate losses are holding at midday.
Moderate price erosion continues to be seen across the lean hog futures
complex Tuesday morning. The overall lack of support in both pork values and
cash markets has brought renewed pressure to the market. Even though prices
held together relatively well through most of the morning, that has quickly
changed at midday with nearby contracts holding losses near $1 per cwt. The
overall lack of technical and fundamental support is offsetting any sense of
oversold market status the market may have. This could bring additional
uncertainty to the entire complex. Cash prices are lower on the National Direct
morning cash hog report. The weighted average price fell $0.93 per cwt to
$61.47 per cwt with the range from $56.00 to $63.00 per cwt on 3,631 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $1.05 per cwt to $62.37 per cwt
with the range from $56.00 to $63.00 per cwt on 1,326 head reported sold. The
National Pork Plant Report reported 210 loads selling with prices falling $0.19
per cwt. Lean hog index for 8/19 is at $67.02, down 0.20 with a projected
two-day index of $66.96 down 0.06.
Rick Kment can be reached at firstname.lastname@example.org
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