DTN Midday Livestock Comments 01/04 12:05
Renewed Support Develops in Lean Hog Futures
Additional follow-through support has held lean hog futures higher Friday
morning. Trade in the live cattle remains mixed with front-month contracts
shifting lower due to late-week profit taking following Thursday's sharp rally.
By Rick Kment
Livestock futures are mixed at midday with live cattle futures holding mixed
prices in light trade following late-week positioning after the sharp
triple-digit gains developed Thursday. Lean hog futures continue to gain
support, although trade volume remains sluggish. Corn futures are trading lower
at midday in light trade. March corn futures are holding 7 cent losses at
midday. Stock markets are higher in light trade. The Dow Jones is 16 points
higher while Nasdaq is up 2 points.
The lack of follow-through buyer support after Thursday's triple digit gains
has left the market hung over as early mixed trade has remained through most of
the morning. Nearby contracts have faded due to lack of new news in the market
and no additional buyers stepping up to the plate. There is also some late-week
profit taking being done through the last half of the session Friday. Deferred
futures are still holding slight gains, although very little interest has
developed through midday. Cash cattle trade is still quiet, with packers still
unwilling to post higher bids at this point. Initial bids are seen in the North
at $198 to $201 per cwt, but these prices are not likely to gain much
attention. Asking prices remain firm at $131 to $133 in the South and $207 and
higher in the North. Beef cut-outs at midday are lower, $1.13 lower per cwt
(select) and down $0.09 per cwt (choice) with moderate movement of 113 total
loads reported (51 loads of choice cuts, 29 loads of select cuts, 16 loads of
trimmings, 17 loads of ground beef).
Despite the lack of support in the live cattle market that was expected to
redevelop, feeder cattle futures remain well supported through the morning.
Nearby contracts in the electronic markets are holding 50 to 80 cent gains,
although pit-trade activity remains at a near standstill due to lack of trade
interest. Overall volume in feeder cattle futures is expected to remain
sluggish through the session, but this will likely help to maintain early
Moderate to strong price support has developed through morning trade across
the lean hog futures market. The lack of follow-through support in the live
cattle market has actually helped to draw some light to moderate additional
commercial support back into the lean hog complex. Traders expect to see light
to moderate support in the cash market at the end of the week, which is helping
to support the idea that supplies may continue to be manageable over the near
future. Cash prices are unreported due to confidentiality on the Iowa/Minnesota
morning cash hog report. Fresh pork trade posted 7 loads of fresh pork selling
on the midday pork carlot report. Lean hog index for 1/02 is at $82.67 up 0.28
with a projected two-day index of $83.04 up 0.37.
The 14-to-16-pound belly markets are unreported on the midday carlot report.
Rick Kment can be reached at firstname.lastname@example.org
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.