DTN Midday Livestock Comments 01/22 12:01
Feeder Cattle Selling Continues
Sharp losses have quickly developed across feeder cattle futures Tuesday
morning. This pressure is causing all cattle markets to adjust lower through
morning trade. Early support in hog trade has eroded through morning trade.
By Rick Kment
Livestock futures are mixed in limited early-week trade. Traders seem to
have little concern with a shortened trading week as strong triple-digit losses
in feeder cattle futures is eroding previous support seen late last week. Hog
futures remain mixed in limited direction, although most contracts are holding
narrow gains. Corn markets are lower in light trade. March corn futures are 2
1/4 cents lower. Stock markets are lower in light trade. Dow Jones is 283
points lower with Nasdaq down 103 points.
Sluggish activity has developed through most of the morning as traders try
to slowly get back into the routine following the three day weekend. Firm
pressure is starting to develop in lightly traded spot month contracts, while
moderate softness has developed through the rest of the market in connection
with strong triple-digit losses across feeder cattle trade. Traders remain
concerned about long-term summer and fall beef demand, which is starting to be
seen in futures trade as well as feeder cattle market activity. Cash markets
remain quiet with bids and asking prices still hard to find. It is expected
that bids will not be active until midweek or later, with trade pushed off
until later in the week once again. Boxed Beef cut-outs at midday are higher,
$0.15 higher (select) and up $0.59 per cwt (choice) with light movement of 45
total loads reported (22 loads of choice cuts, 17 loads of select cuts, no
loads of trimmings, 5 loads of ground beef).
Sharp losses have quickly moved into feeder cattle trade Tuesday morning as
any stability seen late last week seems to have been thrown out the window as
traders focus on longer-term concerns of higher production costs and questions
of beef demand growth. Even though live cattle futures are holding well in
nearby trade over the past couple of weeks, the discount seen in late summer
and early fall contracts is adding even more concern to feeder cattle prices.
LEAN HOGS: Despite a firm early start Tuesday morning in lean hog futures
prices, traders have slowly backed away from session highs with very limited
direction developing across the entire lean hog market. April and May contracts
still remain under light to moderate pressure with April futures holding a 60
cent loss. The rest of the complex is maintaining firm buyer support with
traders looking for increased trade volume through the rest of the complex. The
overall sluggish market direction and pressure in cattle trade is likely to
limit any buyer activity through the rest of the session. But traders seem
focused on slowly bringing support back to the complex following recent losses.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price is down $0.15 at $52.20 per cwt with the range from
$50.00 to $53.00 on 4,736 head reported sold. Cash prices unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork
carcass values are higher on the morning report with prices adding $0.74 per
cwt at $71.57 per cwt with 180 loads traded. Lean hog index for 1/18 is $58.07,
down 0.09, with a projected two-day index is unavailable at this time.
Rick Kment can be reached at email@example.com
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