DTN Midday Livestock Comments 10/01 12:02
Feeder Cattle Futures Explode Higher
Early sluggish trade was quickly interrupted Wednesday morning when
aggressive buyer interest flooded into the feeder cattle futures. This quickly
pushed nearby feeder cattle futures limit higher and sparked widespread buying
across the rest of the livestock complex.
By Rick Kment
Strong gains have quickly developed across the entire livestock complex
Wednesday morning as aggressive early month buying has stepped into the feeder
cattle markets. The $3 per cwt rally across all nearby feeder cattle contracts
helped to put the rest of the complex in high gear as buyers have quickly come
out of the woodwork. Corn futures are higher at midday. December corn futures
are 1 cent per bushel higher. Stock markets are lower in light trade. The Dow
Jones is 207 points lower while Nasdaq is down 60 points.
What started out as another lackluster and tightly grouped trading session
has exploded into aggressive triple digit gains through all nearby contracts.
Fed cattle traders are just trying to keep up with the pace set by buyers in
feeder cattle futures. The overall expectation that cattle numbers will remain
tight seems to be overshadowing all concerns about the ability to move beef at
higher prices. December futures are leading the market higher with a $2.10 per
cwt rally. Cash cattle markets remain at a standstill with bids still
undeveloped. It is likely to be Thursday or Friday before active trade is seen.
Asking prices remain at $162 to $163 per cwt in the South and $253 and higher
in the North. Beef cut-outs at midday are higher, $0.74 per cwt higher (select)
and up $0.09 per cwt (choice) with active movement of 144 total loads reported
(76 loads of choice cuts, 36 loads of select cuts, 5 load of trimmings, 28
loads of ground beef).
Feeder cattle futures are on fire through morning trade as a combination of
commercial and investment buyer interest flooded into the market midmorning.
The lower cost of production from grain market weakness is sparking an
increased interest in feeder cattle in all sectors. October through March
futures are locked in limit higher trade of $3 per cwt with the rest of the
complex nearing that level at midday.
The runaway gains in the feeder cattle futures seemed to help buyers regroup
in the lean hog futures market following moderate early pressure. At midday all
but front month October futures are trading higher due to the spill over
support seen in the cattle complex. These gains come even as average hog
weights at the end of last week increased 1.7 pounds per hog from the previous
week and up 11 pounds from year ago levels. Even though this move is seasonal,
the focus on higher numbers is expected to be keeping pork supplies readily
available. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price fell $4.33 per cwt to $102.40 per cwt with
the range from $96.00 to $108.50 per cwt on 3,416 head reported sold. Cash
prices are lower on the Iowa Minnesota Direct morning cash hog report. The
weighted average price fell $2.99 per cwt to $105.85 per cwt with the range
from $96.00 to $108.00 per cwt on 153 head reported sold. The National Pork
Plant Report reported 259 loads selling as prices gaining $0.60 per cwt. Lean
hog index for 9/29 is at $108.96 up 0.66, with a projected two-day index of
$109.45 up 0.49.
Rick Kment can be reached at firstname.lastname@example.org
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