DTN Midday Livestock Comments 08/29 11:57
Hog Futures Surge Higher
October lean hog futures are at or near the $3 trading limit at midday as
aggressive gains hold through the hog complex at the end of the week. Spill
over buying has swept through the cattle complex, replacing moderate early
losses with moderate to strong gains late Friday.
By Rick Kment
Unchecked buying quickly developed in front month lean hog futures during
the lightly traded Friday session. This pushed contracts to daily trading
limits through the morning, and sparked spill over support through the rest of
the complex. Corn futures are lower at midday. September corn futures are 4
cents per bushel lower. Stock markets are higher in light trade. The Dow Jones
is 2 points higher while Nasdaq is up 15 points.
The fact that strong late-week support quickly flooded back into the lean
hog futures market has changed the overall tone of the cattle market late
Friday. Follow-through buyer support has quickly redeveloped, seemingly out of
thin air through the end of the session, with moderate to strong gains holding.
It is uncertain just how much volume will be seen through the end of the
session, but for now, the higher close could help to spark interest next week
when traders return from holiday activities. Cash cattle trade is undeveloped
Friday morning with both sides digging in their heals in front of the holiday
weekend. Bids are seen at $151 in the South and $243 in the North. Asking
prices are holding at $155 in the South and $245 to $247 per cwt in the North.
Beef cut-outs at midday are lower, 0.49 per cwt lower (select) and down $0.90
per cwt (choice) with active movement of 159 total loads reported (79 loads of
choice cuts, 38 loads of select cuts, 27 loads of trimmings, 13 loads of ground
Traders in the feeder cattle futures have shaken off early pressure as
traders look for additional support coming from both the lean hog and live
cattle futures market. Trade mentality seems to be focused on closing the week
higher given the light trade volume and lack of additional fundamental pressure
seen in the market. Contracts are seen 50 cents to $1 per cwt higher at midday,
but prices could see a significant price swing before closing bell.
End-of-week buying has flooded back into the lean hog futures market with
front-month October futures trading at or near the $3 trading limit at midday.
All other nearby contracts are holding gains of $1 to $2 per cwt at midday as
the focus is being put on potential fundamental support seen through early
September which could lead to another round of active commercial and investment
support quickly stepping into the complex. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price added $0.10
per cwt to $90.56 per cwt with the range from $90.00 to $90.57 per cwt on 3,459
head reported sold. Cash prices are unreported due to confidentiality the Iowa
Minnesota Direct morning cash hog report. The National Pork Plant Report is
reported 134 loads selling as prices up $1.00 per cwt. Lean hog index for 8/27
is at $98.86 down 1.48, with a projected two-day index of $97.56 down 1.30.
Rick Kment can be reached at email@example.com
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