DTN Midday Livestock Comments 11/30 12:21
Feeder Cattle Futures Tumble Midmorning
Sharp losses developed Monday morning in feeder cattle futures as traders
continue to adjust positions at the end of the month. This is starting to
create additional pressure in nearby live cattle trade, eroding nearby futures.
Hog trade remains sluggish with prices hovering in a narrow range at midday.
By Rick Kment
Livestock futures are moving lower Monday morning with feeder cattle futures
leading the downward movement with prices $3 per cwt lower in most contracts.
This is putting pressure in all cattle markets, and keeping most buyers on the
sidelines. Lean hog prices are narrowly lower, but still unable to draw buyers
to the table. Corn prices are higher in light trade. December corn futures are
6 cents higher in front month December contracts. Stock markets are lower in
light trade. The Dow Jones is 47 points lower while Nasdaq is down 23 points.
Live cattle futures have eroded at midday based on follow-through pressure
in feeder cattle markets. The lack of additional buyer support on the last
trading session of November is creating additional concerns of increased
late-day pressure filtering into the complex before closing bell. Cash cattle
market activity remains quiet with showlists mixed to generally smaller for the
week. This is curious given the generally light trade seen last week. Bids and
asking prices are undeveloped, although packers are expected to be extremely
short bought going into the week. Beef cut-outs at midday are higher, $0.66
higher (select) and up $1.19 per cwt (choice) with light movement of 47 total
loads reported (21 loads of choice cuts, 5 loads of select cuts, 7 loads of
trimmings, 14 loads of ground beef).
Triple-digit losses are seen through feeder cattle trade with nearby and
deferred contracts hovering around $3-per-cwt losses. The lack of support in
cash markets late last week as well as no additional buyer support in the live
cattle market is allowing feeder cattle markets to erode in the last day of
November. The volatility seen in the feeder cattle market could create some
wide-ranging price swings later in the week, which could quickly bounce back
from these late-month losses.
Light pressure is seen through the lean hog futures market early Monday as
late-month positioning is backing away from holiday buyer support. Even though
some additional long-term buyer support continues to be established after
moving off of seasonal lows, traders are pulling away from prices in December
lean hog futures, which may allow for soft price levels at the end of the
trading session. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price fell $1.02 per cwt to $49.71 per cwt with
the range from $47.00 to $52.25 per cwt on 2.285 head reported sold. Cash
prices are unreported due to confidentiality on the Iowa Minnesota Direct
morning cash hog report. The weighted average price added $0.31 per cwt to
$52.21 per cwt with the range from $47.00 to $52.25 per cwt on 2.285 head
reported sold. The National Pork Plant Report reported 114 loads selling with
prices up $1.29 per cwt. Lean hog index for 11/19 is at $55.52 down 0.35, with
a projected two-day index of $55.37, down 0.37.
Rick Kment can be reached at email@example.com
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