DTN Midday Livestock Comments 02/23 11:58
Light Trade Keeps Futures Weak Friday
Light to moderate pressure redeveloped in cattle trade through most of the
morning. This lack of buyer support and inability to cover short positions may
add longer-term weakness to the complex. Hog markets have turned slightly lower
as traders try to square positions following the aggressive market rally over
the last few days.
By Rick Kment
Light to moderate pressure is seen in most livestock trade as cattle futures
continue to erode due to concerns of additional pressure developing in the near
future. Hog trade is focusing on end-of-week position squaring, as limited
losses are seen Friday morning. Corn prices are steady to lower in light trade.
March corn futures are 1/2 cent lower Friday. Stock markets are higher in light
trade. The Dow Jones is 137 points higher while Nasdaq is up 59 points.
Moderate to firm losses have quickly developed through the live cattle
futures market. Traders are also focusing on the inability to bring additional
volume to the market at the end of the week. Some late-day market shifts may
continue to develop as traders focus on the upcoming cattle on feed report.
This may add even more uncertainty to the complex and spark some early-week
market shifts Monday morning. Cash cattle bids have developed at $128 live
through the South and $202 dressed in the North through the morning. Although
there may still be a few cattle needing to be sold, it appears that for the
most part both sides seem comfortable with previous market activity. This could
allow for markets to remain at current levels with activity next week focusing
on end-of-month needs also. Boxed beef cut-outs at midday are mixed, $0.83
higher (select) and down $0.32 per cwt (choice) with light movement of 39 total
loads reported (15 loads of choice cuts, 7 loads of select cuts, no loads of
trimmings, 17 loads of ground beef).
Feeder cattle futures have traded moderately lower through most of the
morning, although prices have tried to break out of the lower market moves.
This could add even more softness to the complex over the near future, as
traders continue to focus on increased activity through the next couple of
days. March futures are unchanged in light midday trade as the potential for
late-day support may move back into the market.
Light pressure is slowly trickling into the lean hog complex Friday morning
following a strong market rally over the last two sessions. This overall
support seen in the market has quickly pulled prices well off of recent lows,
but traders are now starting to focus on end-of-week positioning, which could
lead to increased volatility. The strength in the market continues to hold, but
could draw additional buyer activity back to the market over the next week.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price is down $0.73 at $62.83 per cwt with the range from
$57.00 to $63.75 on 3,252 head reported sold. Cash prices are lower on the
Iowa/Minnesota Direct morning cash hog report. The weighted average price is
down $0.52 at $63.19 per cwt with the range from $62.00 to $63.75 on 492 head
reported sold. The National Pork Plant Report posted 135 loads selling with
carcass values adding $0.77 per cwt. Lean hog index for 2/21 is at $70.17, down
0.61 with a projected two-day index of $69.78, down 0.39.
Rick Kment can be reached at email@example.com
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