Tuesday, August 21, 2018  

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DTN Midday Livestock Comments          08/20 11:58

   Hog Futures Shift Lower Monday

   Pressure has redeveloped across the lean hog complex as traders have focused 
on squaring positions following the aggressive shift higher over the last week. 

By Rick Kment
DTN Analyst


   Light buyer activity is slowly trickling back into cattle futures with 
deferred markets holding gains at midday. The pressure in front-month futures 
is focusing on the selling activity seen in lean hog futures as well as 
pressure in several outside markets through the morning. Corn markets are lower 
in light trade activity. September corn futures are 3 cents lower. Stock 
markets are higher in active trade. The Dow Jones is 96 points higher while 
Nasdaq is up 4 points.


   Narrow gains have redeveloped in deferred live cattle futures with prices 10 
to 20 cents per cwt in most contract months. There continues to be limited 
pressure holding on in front-month August futures as traders continue to focus 
on the pressure in outside markets. But the firm tone set at the end of last 
week in live cattle futures is helping to bring some needed stability to the 
complex. At this point, it is uncertain if this support will carry through cash 
cattle markets, but the firm tone seen in beef values is sparking interest 
based on the ability to draw on seasonal support. Cash cattle activity remains 
extremely quiet with show list distribution and inventory taking seen through 
the morning. Trade last week developed late in the week with prices generally 
$1 to $2.50 per cwt lower than the previous week. This has continued to create 
caution in most traders' minds. Bids and asking prices are undeveloped at this 
point, and likely to remain quiet until midweek. Boxed Beef cut-outs at midday 
are higher, $0.59 higher (select) and up $1.98 per cwt (choice) with light 
movement of 53 total loads reported (28 loads of choice cuts, 15 loads of 
select cuts, 6 loads of trimmings, 4 loads of ground beef).


   Limited buying has slowly developed through late morning with traders moving 
away from the narrow losses seen just after opening bell. August futures remain 
lightly traded with most of the open interest moving to September contracts. 
But front-month futures are still holding a 62 cent loss due to the inactivity. 
The rest of the complex remains slightly higher with gains of 15 to 30 cents 
per cwt. Additional market interest may slowly develop through the rest of the 


   Strong triple-digit losses have quickly developed through the nearby lean 
hog complex with October futures holding a $2.15 per cwt loss. This has moved 
prices back to $56.50 per cwt. This is still a strong market surge following 
the continued buyer activity seen through the last week. Cash prices are lower 
on the National Direct morning cash hog report. The weighted average price is 
down $0.51 at $40.07 per cwt with the range from $38.00 to $40.50 on 2,815 head 
reported sold. Cash prices are unreported due to confidentiality on the 
Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report 
is unreported at this time. Lean hog index for 8/16 is at $52.94 down 1.27 with 
a projected two-day index of $51.51, down 1.43.

   Rick Kment can be reached at rick.kment@dtn.com 


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