DTN Midday Livestock Comments 08/29 12:14
Cattle Futures Continue Lower Monday
Strong losses have continued to develop across live cattle and feeder cattle
markets as traders search for long-term market support, but unable to find
stability as August draws to a close.
By Rick Kment
Sharp losses continue to be seen through live cattle futuers following the
lack of support in either fundamental or technical support over the last week.
Further pressure in boxed beef values in the morning report is adding even more
uncertainty to the already soft market structure. Corn prices are lower in
light trade. September corn futures are 4 cents lower. Stock markets are higher
in light trade. The Dow Jones is 119 points higher while Nasdaq is up 25 points.
Strong losses continue to develop through most live cattle futures markets.
There may be additional trade volume developing through the end of the session,
but the lack of underlying fundamental support and concern that markets will
continue to take out short and long-term support levels is causing many traders
to remain bearish through the end of the month. Cash cattle markets remain
quiet with bids and asking prices undeveloped at this point. The overall lack
of support over the last couple of weeks continues to point to market
uncertainty. Active trade is not expected to be seen until midweek or later.
Beef cut-outs at midday are lower $0.60 lower (select) and down $0.57 per cwt
(choice) with light movement of 63 total loads reported (31 loads of choice
cuts, 18 loads of select cuts, 1 load of trimmings, 13 loads of ground beef).
Triple-digit losses have once again redeveloped Monday morning as traders
continue to search desperately for price support through the end of August. The
price spread between feeder cattle and live cattle futures continues to slowly
narrow, which may help to improve margin opportunities through the end of the
year. But the lack of support in live cattle futures and expected strong
placement numbers through the end of the year could keep the cattle market over
the next couple of weeks.
Lean hog futures continue to hold light to moderate gains midday Monday as
follow through buyer support continues to trickle into the market following the
aggressive triple-digit gains. Even though strong buyer support has not
redeveloped following the weekend, the ability to keep buyers moving slowly
back into the complex could spark renewed long-term support in what expect to
be a very oversold market complex. Cash prices are lower on the National Direct
morning cash hog report. The weighted average price fell $1.25 per cwt to
$59.43 per cwt with the range from $55.00 to $61.00 per cwt on 3,478 head
reported sold. Cash prices are unreported due to confidentiality on the Iowa
Minnesota Direct morning cash hog report. The National Pork Plant Report
reported 138 loads selling with prices adding $0.85 per cwt. Lean hog index for
8/25 is at $66.90 down 0.14 with a projected two-day index of $66.61 down 0.29.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2016 DTN/The Progressive Farmer. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up