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
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 firstname.lastname@example.org
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.
Get your local Cash Bids emailed to you each morning from DTN – click here
to sign up for DTN Snapshot.