DTN Midday Livestock Comments 09/29 11:55
Cattle Futures Hold Narrow Losses At Midday
Livestock futures remain narrowly mixed at midday with traders focusing on a
very inactive market Thursday morning. Cash hog markets continue to turn lower
through the week focusing on weakness in pork values while cash cattle trade
remains sluggish following midweek price pressure.
By Rick Kment
Livestock trade remains lightly traded Thursday morning with live cattle and
lean hog futures hovering in a narrow price range. Activity is expected to
remain sluggish through the end of the session Thursday, limiting trade
activity and price ranges. December corn futures are 1 cents higher per bushel.
Stock markets are lower in light trade. The Dow Jones is 72 points lower while
Nasdaq is down 26 points.
Live cattle futures have widened the trading ranges at midday from the
single digit price activity seen through most of the morning, but the complex
remains stuck in a sideways trading range following lack of activity through
the end of the month. The inability for traders to break out of the wide market
range established during the month of September has created a lethargic market
condition in which commercial traders are willing to remain on the sidelines.
With narrow trading ranges separating nearby contracts, little incentive is
seen in contract spreading at this point either, allowing for additional market
inactivity. Cash cattle activity remains sluggish Thursday morning with bids
redeveloping in the North. A handful of cattle have been reported sold in Iowa
at $160 per cwt, on the low end of the range seen earlier in the week. Bids
through the rest of the areas are seen at $160 to $161 with some additional
cattle potentially needing to still be moved before the end of the week in
order to fill procurement lists for next week. Southern trade may be done for
the week, although prices in all areas are likely to have been set unless a
major surprise is seen in futures trade over the next couple of days. Beef
cut-outs at midday are higher $0.22 higher (select) and up $0.17 per cwt
(choice) with active movement of 80 total loads reported (41 loads of choice
cuts, 12 loads of select cuts, 14 loads of trimmings, 13 loads of ground beef).
Light gains held through most of the morning Thursday, although traders
continue to limit interest as seller activity stepped back into the market at
midday. The lack of buyer support late in the week had little to do with market
pressure and more to do with no trade volume redeveloping at the end of the
month. September contracts remain undeveloped due to lack of open interest seen
late in the contract life, while the rest of the market remains stuck in narrow
price moves in a mixed range. Choppy directionless trade is expected to
continue through the end of the session.
Narrow gains are holding across the lean hog complex as buyers are able to
push front month October contracts to $52 per cwt with a 30 cent per cwt gain.
All nearby contracts are holding narrow to moderate gains, which is supportive
given that cash markets and pork prices continue to work lower, but the fact is
that without significant buyer support willing to step back into the market,
narrow gains seen Thursday will mean very little. Contracts continue to hover
near contract lows with the next big break lower potentially pushing prices
over the edge and breaking through support levels. Cash prices are lower on the
National Direct morning cash hog report. The weighted average price fell $0.99
per cwt to $48.56 per cwt with the range from $46.00 to $50.00 on 3,824 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $0.87 per cwt to $48.82 per cwt
with the range from $46.00 to $50.00 on 1,148 head reported sold. The National
Pork Plant Report reported 202 loads selling with prices falling $1.35 per cwt.
Lean hog index for 9/26 is at $58.21 down 0.72 with a projected two-day index
of $57.63 down 0.58.
Rick Kment can be reached at email@example.com
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