DTN Midday Livestock Comments 02/22 11:47
Additional Losses Sweep Through Cattle Trade
Firm live cattle futures pressure has redeveloped through the complex. This
is adding to the aggressive triple-digit losses seen midweek. Although there
continues to be some uncertainty as to how much additional losses are expected,
some buying interest has managed to step into deferred contracts.
By Rick Kment
Follow-through pressure has continued to develop in cattle trade with the
focus split between pressure developing in the cash cattle markets and
additional weakness seen as prices reach technical tipping points. Hog trade is
holding firm support Thursday. Corn prices are steady to higher in light trade.
March corn futures are 3/4 cent higher Thursday. Stock markets are higher in
light trade. The Dow Jones is 303 points higher while Nasdaq is up 45 points.
Lower trade continues to be seen in most live cattle futures, although
prices have been seen in a very wide range of movement through the morning. At
midday prices range from $1.27 per cwt lower to 12 cents per cwt higher. The
overall lack of buyer support seen in nearby contracts has caused widespread
nearby market losses to redevelop. But deferred futures remain steady to
slightly higher as the focus on lack of additional trade moving into the market
may help to allow market firmness. There continues to be some additional longer
term trade activity developing in the complex as traders are focusing on the
ability to not only adjust prices, but stabilize open interest at the end of
the week. Cash cattle trade is starting to slowly pick up in the North with
dressed trade reported at $204 to $205 per cwt. These prices are steady to $1
per cwt lower than last week, and may be the trend for the week even though
more activity is expected to develop before the end of the week. Live bids are
being restated at $127 to $128 live basis. Prices of $128 per cwt were able to
establish light sales activity Wednesday, but the overall uncertainty of the
market may continue to limit trade at these levels. But packers continue to
need cattle to keep chain speed active through the end of the month. Asking
prices remain firm at $130 live basis and $205 dressed. Boxed beef cut-outs at
midday are higher, $0.22 higher (select) and up $0.04 per cwt (choice) with
light movement of 57 total loads reported (42 loads of choice cuts, 9 loads of
select cuts, no loads of trimmings, 6 loads of ground beef).
Firm pressure is seen through feeder cattle futures once again Thursday.
Even though markets have been contained to moderate losses through the morning,
there is still an uneasiness surrounding the entire complex as prices seem to
have a hard time finding any sense of short-term support. Prices are holding
within a range of 30 to 60 cents per cwt lower as the overall lack of direction
in the market continues to focus on increased market pressure and the
late-month pullback from previous highs.
Firm follow-through support has quickly moved into the lean hog complex
Thursday with prices 80 cents to $1 per cwt higher during most of the morning
trade. Price levels have changed very little during the morning after initial
position taking developed and increased volume was seen through the complex.
The inability to move prices higher is focusing on the overall lack of new
interest seen in the market, although prices have broken through last week's
highs in search of additional underlying support. Cash prices are lower on the
National Direct morning cash hog report. The weighted average price is down
$0.57 at $63.36 per cwt with the range from $57.00 to $63.50 on 2,370 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 177 loads selling with carcass values adding $0.88 per cwt. Lean hog
index for 2/20 is at $70.78, down 0.63 with a projected two-day index of
$70.17, down 0.61.
Rick Kment can be reached at email@example.com
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.
Your local weather forecast from DTN can be sent to your email every morning free through DTN Snapshot