DTN Midday Livestock Comments 06/27 12:08
Strong Cattle Market Gains Hold Monday
Cattle futures are rebounding through the morning Monday with triple-digit
gains able to hold firm. The pressure that is redeveloping in the lean hog
market is pointing to additional follow-through softness likely to develop
through the week.
By Rick Kment
Cattle futures are holding strong triple-digit gains in nearby contracts as
the focus through the market continues to be driven on short-covering activity
after the aggressive Friday losses. Trade activity is expected to remain
sluggish through the rest of the complex, although the tone of the market is
likely to remain firm. Corn prices are higher. July corn futures are 4 cents
higher. Stock markets are lower in light trade. The Dow Jones is 248 points
lower while Nasdaq is down 99 points.
Live cattle futures are holding strong triple-digit gains based on short
covering activity following Friday's losses. The firm support in the grain
market is helping to draw buyers back to the complex. Cash cattle markets
remain quiet with show lists coming in smaller than last week. The focus on the
long holiday weekend, and lower plant output due to the holiday next week is
expected to limit overall trade activity through the end of the week. The fact
that this week ends both the month of June and second quarter may create
additional lack of support early in the week when it comes to cash markets.
Beef cut-outs at midday are mixed $0.21 higher (select) and down $1.53 per cwt
(choice) with light movement of 82 total loads reported (40 loads of choice
cuts, 12 loads of select cuts, 6 loads of trimmings, 23 loads of ground beef).
Firm buyer support continues to hold early Monday with gains stepping into
the complex following the sharp losses late last week. Although some support
has slowed in deferred contracts, nearby futures continue to hold triple-digit
gains. The focus on short covering has driven the market so far through the
morning, but it is uncertain if additional buyer support is available and
willing to step into the market through the end of the session.
Moderate to strong pressure is seen through the lean hog futures complex
Monday morning. The fact that prices continue to push lower is no significant
surprise given the lack of buyer support willing to step into the recent market
as it tumbles lower. But there are questions about just how much follow through
pressure will develop. This could limit long term support over the future as
fall contracts are holding triple digit losses. Cash prices are lower on the
National Direct morning cash hog report. The weighted average price fell $0.90
per cwt to $80.10 per cwt with the range from $74.00 to $81.50 per cwt on 3,411
head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning
cash hog report. The weighted average price fell $1.45 per cwt to $80.57 per
cwt with the range from $79.75 to $81.50 per cwt on 155 head reported sold. The
National Pork Plant Report reported 182 loads selling with prices falling $0.57
per cwt. Lean hog index for 6/23 is at $84.41, up 0.39 with a projected two-day
index of $84.61 up 0.20.
Rick Kment can be reached at email@example.com
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