DTN Midday Livestock Comments 08/26 12:01
Hog Futures Lead Complex Higher
Strong support continues to develop through the lean hog futures market with
traders focusing on potential fall pork demand growth. Cattle futures are
gaining momentum at midday after spending most of the morning mixed in a narrow
By Rick Kment
Lean hog futures continue to show strong support as traders are focusing on
triple-digit gains seen in all nearby contracts. There is expected to be some
additional focus on the potential supply issues through the end of the year as
it appears demand may be building following the holiday weekend. Cattle futures
are higher midday after holding moderate mixed trading ranges through most of
the morning. Corn futures are lower at midday. September corn futures are 6
cents per bushel lower. Stock markets are higher in light trade. The Dow Jones
is 42 points higher while Nasdaq is up 9 points.
Moves across the live cattle complex have bounced higher and lower through
most of the morning with moderate to strong support redeveloping at midday.
This could lead to additional commercial support developing before the end of
the session Tuesday, although little encouragement is seen from beef values at
this point. The idea that meat buyers may continue to go into the holiday
weekend with a hand-to-mouth mentality could help to draw additional support
into the futures complex late in the week. Cash cattle markets remain quiet
with bids still undeveloped. It is likely that it will be the second half of
the week although it is likely that both sides would desire to get business
done before Friday afternoon in front of the long weekend. Asking prices are
still not fully defined, but early bids are seen at $154 to $155 in the South
and $245 to $248 per cwt in the North. Beef cut-outs at midday are lower, 0.32
per cwt lower (select) and down $0.21 per cwt (choice) with moderate movement
of 101 total loads reported (38 loads of choice cuts, 28 loads of select cuts,
19 load- of trimmings, 16 loads of ground beef).
Light buyer support continues to trickle into the feeder cattle futures
market. This lack of strong gains is not unexpected given the recent market
activity in the complex. But traders continue to focus on the potential of
moderate to firm beef market support over the long term, while still
maintaining a tight supply level of feeder cattle for the foreseeable future.
Aggressive gains have developed through the lean hog futures market with
nearby contracts holding gains from $1.50 to $1.80 per cwt. But technically,
strong additional gains are going to have to continue to be seen in order to
indicate a longer-term market rally. Given the recent pressure in the complex,
further market support could still be seen over the near future, with the
market still remaining stuck in a sideways range, Which could be hard to break
out of before the end of the month. Cash prices are higher on the National
Direct morning cash hog report. The weighted average price added 0.20 per cwt
to $93.50 per cwt with the range from $90.99 to $94.50 per cwt on 816 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $0.20 per cwt to $93.96 per cwt
with the range from $91.50 to $94.50 per cwt on 690 head reported sold. The
National Pork Plant Report is reported 194 loads selling as prices up $1.19 per
cwt. Lean hog index for 8/22 is at $103.32 down 1.67, with a projected two-day
index of $101.91 down 1.41.
Rick Kment can be reached at email@example.com
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