DTN Midday Livestock Comments 09/24 12:02
Cattle Futures Weaken
Firm pressure in cattle trade is setting the tone as traders continue to
trade the cattle on feed data through the day Monday. This is expected to leave
cattle futures weak through the end of the session.
By Rick Kment
Cattle futures are under firm pressure as follow-through losses are seen
during the entire morning. This increased cattle placements and larger on feed
number than what was expected is causing widespread weakness. Corn markets are
higher in light trade. September corn futures are 2 cents higher. Stock markets
are lower in light trade. The Dow Jones is 176 points lower while Nasdaq is
down 12 points.
Strong pressure has been seen Monday morning through the live cattle
complex. Very little long-term direction is seen through the morning, although
traders seem to be still adjusting to Friday's cattle on feed report. It is
uncertain just how much of this market reaction will be confirmed as additional
trade volume moves into the market over the next couple of days. It is expected
that additional market volatility may develop over the coming days. Cash cattle
markets are silent Monday morning with show list distribution and inventory
taking the main order of business. This may continue through the middle of the
week, allowing for increased movement Thursday and Friday. Boxed Beef cut-outs
at midday are lower, $0.76 lower (select) and down $1.45 per cwt (choice) with
light movement of 42 total loads reported (25 loads of choice cuts, 9 loads of
select cuts, 0 loads of trimmings, 7 loads of ground beef).
Strong triple-digit pressure is moving into the feeder cattle futures market
early Monday. The firm gains from year-ago levels seen on the cattle on feed
report when it comes to feedlot placements have pulled any sense of market
support away from the complex. The placements on the September 1st report, is
the largest number of placements seen since these current numbers have been
recorded. The focus on lower grain prices is creating a push to put more cattle
in feed yards earlier than what is typically seen. This may influence not only
current levels, but shift percentages through the end of the year.
Lean hog futures are mixed in a narrow range with very limited activity seen
through the entire complex. The limited movement in cash and futures trade is
likely to leave prices hovering within a very narrow range through the rest of
the session. Narrow losses in nearby contracts have been influenced by the
pressure in the cattle complex. The focus on firming support in deferred trade
is helping to spark some additional, but light buyer interest. Cash prices are
unreported due to confidentiality on the National Direct morning cash hog
report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota
Direct morning cash hog report. The National Pork Plant Report posted 122 loads
selling on the morning report. Pork carcass values added $0.78 per cwt at
$79.96 per cwt. Lean hog index for 9/20 is at $59.09 up 1.65 with a projected
two-day index of 60.85, up 1.76.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.
For more free DTN information sent right to your email each morning - click here
to sign up for DTN Snapshot.