DTN Midday Livestock Comments 03/30 11:46
Cattle Futures Turn Lower Monday Morning
Initial buyer support seen in the livestock market has quickly washed away
with aggressive pressure seen in both live cattle and feeder cattle trade. Lean
hog futures remain mixed as gains in deferred contracts are countering the
nearby contract pressure.
By Rick Kment
Early buyer support seen in the livestock market has created a strong turn
lower in live cattle and feeder cattle futures. The lack of stability in cattle
trade despite a turn higher in cash cattle prices and higher beef values is
pointing to some additional end of the month and quarter liquidation. Corn
prices are higher in light trade. May corn futures are 2 cents per bushel
higher. Stock markets are higher in light trade. The Dow Jones is 274 points
higher while Nasdaq is up 47 points.
Initial buyer support early Monday morning has turned into a moderate
selloff that is being led by aggressive pressure in the feeder cattle complex.
The firmness in boxed beef values is unable to gain any attention from live
cattle futures trade with losses holding from 50 to 70 cents per cwt at midday.
Cash cattle trade remains quiet Monday morning, which is not unexpected as
packers continue to focus on upcoming needs through the following week. It is
likely that trade will be pushed to the end of the week once again. Asking
prices are undeveloped for the most part, but expected to be seen around $167
and higher in the South and $267 to $268 in the North. Beef cut-outs at midday
are higher, $2.57 higher (select) and up $1.70 per cwt (choice) with light
movement of 53 total loads reported (24 loads of choice cuts, 10 loads of
select cuts, seven loads of trimmings, 12 loads of ground beef).
Initial buyer interest which was seen through the cattle complex and feeder
cattle trade specifically was quickly offset by aggressive selling pressure.
The lack of depth in buyer support was evident, as nearby contracts quickly
posted losses of $1.50 to $2 per cwt. So far, it appears that additional
liquidation is not developing, but if additional bullish support does not
develop through the next few hours of trade, some end of the month and quarter
liquidation may quickly develop, which could spark sharp market losses.
Moderate early buyer support across the entire complex has led to moderate
pressure in nearby contracts, while deferred buyer support remains solidly
rooted. Traders continue to adjust positions following Friday's hogs and pigs
report while the focus in nearby contracts has once again moved back to
abundant supplies of hogs near term. The lack of support through cattle markets
during the morning has once again limited outside buyer interest from stepping
back into the complex. Cash prices are unreported due to confidentiality on the
National Direct morning cash hog report. Cash prices are lower on the Iowa
Minnesota Direct morning cash hog report. The weighted average price fell $2.42
per cwt, to $53.46 with a full range of $50.00 to $55.50 per cwt on 135 head
selling. The National Pork Plant Report is reported 177 loads selling as prices
gaining $0.30 per cwt. Lean hog index for 3/26 is at $60.39 down 0.42, with a
projected two-day index of $59.96 down 0.43.
Rick Kment can be reached at email@example.com
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