DTN Midday Livestock Comments 10/27 11:38
Triple-Digit Gains Hold Across Livestock Complex
Strong gains have developed in livestock markets as traders continue to
focus on follow-through buyer support moving into the complex. Firm commercial
interest is seen in nearby cattle and hog contracts Thursday morning, pushing
prices to triple-digit gains.
By Rick Kment
Strong gains have developed across livestock futures with nearby futures
holding gains from $1 to $1.50 per cwt support in cattle and hog trade at
midday. The ability to continue to draw support into the market consistently
through the market may continue to spark additional buyer activity into the
complex. Corn prices are higher in light trade. December corn futures are 5
cents higher per bushel. Stock markets are mixed in light trade. The Dow Jones
is 50 points higher while Nasdaq is down 21 points.
Firm buyer support has quickly moved back into the market early Thursday
morning as additional commercial buying has flooded back into the complex. The
ability to aggressively draw additional open interest to the market is sparking
additional interest in nearby and deferred contracts, and pushing nearby prices
to triple-digit gains. Even though gains are holding, little new support is
seen in the market through midday with October live cattle futures holding a
$1.50 per cwt gain, near the price level seen during most of the morning. Cash
cattle markets are starting to firm with bids quickly developing through the
morning Thursday. Bids in the South are seen from $102 to $104, which is steady
to $2 per cwt higher than last week. Northern bids are seen at $160 at this
point. Asking prices are seen at $105 to $105 in the South and $165 and higher
in the North with no sign that feeders will pull back from those levels at this
point. Trade may be delayed until sometime Friday. Beef cut-outs at midday are
mixed $0.08 higher (select) and up $0.78 per cwt (choice) with moderate
movement of 93 total loads reported (40 loads of choice cuts, 37 loads of
select cuts, 7 loads of trimmings, 9 loads of ground beef).
Strong buyer support once again develops in feeder cattle futures with
triple-digit gains developing in most feeder cattle contracts. November
contracts are trading at $125 per cwt holding at $1.07 per cwt rally at midday
following the triple digit rally seen through the nearby live cattle market.
The underlying firm support seen through the entire week in cattle trade
continues to draw firm but consistent commercial support as traders have moved
from contract lows and are making the case for a strong market rally that could
gain additional momentum through the next couple of weeks if additional cash
market support develops.
Trade across the lean hog complex remains sluggish at midday as gains
continue to hold through the morning. Even though prices have backed slightly
away from session highs due to the lack of trader intensity moving into the
market, the ability to keep prices hovering over triple digit gains in nearby
contracts is helping to sustain market support and likely bring about
additional long term stability through the complex. December futures are
trading above $45 per cwt for the first time since late September, which
continues to move away from contracts lows of $41.10 per cwt. Each trading
session that traders can remove themselves from that level, makes it easier to
break the trend and look forward to shifting toward a new market direction
through the month of November. Cash prices are lower on the National Direct
morning cash hog report. The weighted average price fell $0.59 per cwt to
$44.22 per cwt with the range from $43.00 to $45.50 on 6,528 head reported
sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog
report. The weighted average price gained $0.23 per cwt to $45.24 per cwt with
the range from $43.00 to $45.50 on 2,655 head reported sold. The National Pork
Plant Report reported 206 loads selling with prices slipping $0.02 per cwt.
Lean hog index for 10/25 is at $51.70 up $0.03 with a projected two-day index
of $51.85 up $0.15.
Rick Kment can be reached at email@example.com
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