DTN Midday Livestock Comments 11/19 12:01
Cattle Futures Slip on Feeder Cattle Pressure
Limited activity seen early in the session has allowed for some firm price
pressure to develop during the lightly traded market session. Firm losses in
feeder cattle trade has sparked some underlying pressure across deferred live
By Rick Kment
Firm follow-through buying activity is seen in lean hog futures trade
following strong price support late last week. Cattle markets have backed away
from early support as pressure in feeder cattle markets is leading the market
lower. Corn markets are lower in light trade. December corn futures are 2 cents
lower. Stock markets are lower in light trade. The Dow Jones is 379 points
lower while Nasdaq is down 180 points.
Mixed trade continues to be seen in live cattle trade Monday morning. The
building pressure across feeder cattle trade has eroded buyer support in
deferred contracts for the moment with losses of 2 to 77 cents per cwt
scattered through summer and winter 2019 contracts. Firm gains continue to hold
in nearby trade given the overall lack of active trade through the entire
complex. This may add some additional market volatility through the next couple
of days as limited trade interest is expected to move into the live cattle
complex in front of the holiday break. Cash cattle interest remains undeveloped
with show list distribution and inventory taking the main focus on Monday. It
is expected that bids and asking prices will remain undeveloped through the
rest of the day. Given the holiday-shortened week, there may be some additional
interest moving into the complex sooner than later, with some token bids
possible on Tuesday. Both sides would desire to wrap up cash trade before
Thanksgiving in order to not reenter the market Friday, but it is yet to be
determined if this can be accomplished. Boxed Beef cut-outs at midday are
higher, $0.65 higher (select) and up $0.83 per cwt (choice) with light movement
of 66 total loads reported (35 loads of choice cuts, 9 loads of select cuts, 8
loads of trimmings, 14 loads of ground beef).
Early price support in feeder cattle trade has slowly eroded with prices
holding consistent losses of 30 to 50 cents per cwt. The overall lack of trade
movement in the complex is adding to the overall weakness in the complex. This
may add some additional late-day pressure as traders seem lethargic and may
remain that way through the entire week.
Moderate buyer activity is trickling into lean hog trade through late
morning with February futures gaining the most support and also becoming the
most actively traded session. Follow-through support is developing following
the limit gains on Friday. Most contracts are 10 to 15 cents per cwt higher as
very limited interest is seen through most contract months. This could limit
additional direction later in the session, as prices seem content on recent
market firmness, but unable to spark any aggressive renewed buyer activity.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price is $0.36 lower at $51.24 per cwt with the range from
$46.00 to $51.70 on 3,585 head reported sold. Cash prices are unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. The
National Pork Plant Report posted 180 loads selling on the morning report. Pork
carcass values added $1.43 per cwt at $69.61 per cwt. Lean hog index for 11/15
is $59.10, down 0.76, with a projected two-day index of $58.51, down 0.59.
Rick Kment can be reached at email@example.com
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