DTN Midday Livestock Comments 04/19 11:55
Strong Losses Develop in Cattle Futures
Despite the development of higher cash cattle trade through the southern
regions of cattle country, aggressive midday losses have developed in futures
markets. This push lower is causing some additional widespread market pressure
in all cattle contracts.
By Rick Kment
Pressure has quickly developed across livestock trade Thursday morning.
Cattle markets posted the most aggressive losses with triple digit pressure not
only developing but holding at midday. This could add some additional weakness
to the complex if selling activity redevelops late in the week. Corn prices are
lower in light trade. May corn futures are 1 cent higher. Stock markets are
lower in light trade. The Dow Jones is 127 points lower while Nasdaq is down 65
Sharp losses have swept through live cattle futures Thursday morning. This
overall lack of support in the complex does not completely erode previous
market support. But traders are closely watching the moves Thursday in order to
determine if this latest shift is just a short lived market correction, or if
follow through pressure will continue to develop through the end of the week.
June and August futures are leading the complex lower with losses of $1.70 and
$1.82 per cwt respectively. Cash cattle trade became more evident through the
morning Thursday. Moderate trade has started to develop in Kansas and Texas
with prices seen at $121 to $122 per cwt live basis. This is a $4 per cwt rally
from last week's levels, and likely will spark additional trade volume over the
next several hours. Activity in the North remains quiet with bids developing
once again at $190 per cwt, although feeders have not been willing to bite at
this point. Asking prices for dressed trade remain at $195 and higher. Boxed
Beef cut-outs at midday are mixed, $0.61 higher (select) and down $0.04 per cwt
(choice) with active movement of 111 total loads reported (60 loads of choice
cuts, 22 loads of select cuts, 7 loads of trimmings, 21 loads of ground beef).
Triple-digit losses are seen at midday as traders have allowed for market
shifts to develop through most of the morning. There is growing uncertainty as
to just how much additional weakness will develop Thursday due to traders
seemingly taking a firming tone over the past week. It is expected that this
market pullback is more focused on position-squaring activity, but it may limit
additional support later in the week. May contracts continue to lead the market
lower with a $1.35 per cwt loss.
Pressure has continued to develop across the lean hog futures complex with
increased overall selling activity seen during the morning. The strong triple
digit rally Wednesday has been tempered significantly by 40 to 70 cent losses
in most contracts. The tone of the market still remains extremely firm with
buyers focusing on longer term buyer interest and the recent surge in cash
prices and pork values. Cash prices are higher on the National Direct morning
cash hog report. The weighted average price is up $2.05 at $56.22 per cwt with
the range from $48.00 to $59.00 on 5,787 head reported sold. Cash prices are
higher on the Iowa/Minnesota Direct morning cash hog report. The weighted
average price is up $2.87 at $57.64 per cwt with the range from $48.00 to
$59.00 on 3,491 head reported sold. The National Pork Plant Report posted 148
loads selling with carcass values gaining $0.40 per cwt. Lean hog index for
4/17 is at $55.05 up 1.03 with a projected two-day index of $55.97, up 0.92.
Rick Kment can be reached at email@example.com
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