DTN Midday Livestock Comments 05/07 11:56
Gains Develop in Lean Hog Futures
Trade activity has remained sluggish across the livestock complex. Light to
moderate support is developing in lean hog contracts based on firmness of pork
values and expected cash market support. Cattle markets are less positive as
traders remain uncertain of future beef demand.
By Rick Kment
Livestock futures are mixed at midday. The sharp pressure in the feeder
cattle complex is being offset by light to moderate buyer support in the lean
hog market at midday. Trade volume remains sluggish through the entire complex,
looking for additional fundamental direction. Corn futures are trading higher
in light trade at midday. July corn futures are holding 3 cent gains at midday.
Stock markets are higher in light trade. The Dow Jones is 58 points higher
while Nasdaq is up 2 points.
Nearby live cattle futures are mixed in extremely narrow price ranges and
light trade. Nearby contracts are contained from 12 cents lower to 10 cents
higher at midday. The market is putting most of the focus on deferred futures
which are holding moderate losses as traders remain uncertain of just how much
support will be seen from demand through the summer months. Trade is expected
to remain sluggish during the rest of the trading session. Cash cattle markets
remain mostly quiet although a few sales have been reported in Iowa $2 lower
than last week. Bids in the South are starting to develop at $125 per cwt. The
market appears to remain cautious given the pressure in the futures market
early in the week. This could create widespread selling once one major sale is
triggered. Beef cut-outs at midday are higher, $0.69 per cwt higher (select)
and up $0.16 per cwt (choice) with light movement of 76 total loads reported
(31 loads of choice cuts, 24 loads of select cuts, zero loads of trimmings, 22
loads of ground beef).
Feeder cattle futures are holding sharp losses Tuesday following the renewed
support in the soybean markets, and inability for corn prices to push
significantly lower. Traders are also showing increased concern about the
inability for deferred live cattle futures markets to draw any buyer support
Tuesday. Front month May contracts are leading the market lower with midday
losses of $1.15 per cwt.
Despite the light pressure which developed through the early trade in lean
hog futures markets, moderate buyer interest has stepped into the complex. This
has pushed nearby 20 to 50 cents per cwt higher based on expectations of steady
to firm cash hog prices and gains in pork values at midday. There still remains
a lot of uncertainty concerning future demand growth, but buyers are slowly
stepping back into the market. Cash prices unreported due to confidentiality on
the Iowa/Minnesota morning cash hog report. The National Pork Plant Report
posted 182 loads at midday with carcass values gaining $1.15 per cwt. Lean hog
index for 5/03 is at $87.83 up 1.04 with a projected two-day index of $88.80 up
Rick Kment can be reached at email@example.com
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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.