DTN Midday Livestock Comments 07/01 11:56
Cattle Futures Post Strong Rally
Buyers in cattle futures quickly reacted to Tuesday's sharp losses by
quickly flooding the market with buy orders Wednesday morning. This has pushed
live nearby cattle futures $3 per cwt higher at midday with aggressive buyer
activity seen through the entire cattle complex.
By Rick Kment
Wide prices shifts have quickly developed through the cattle complex with
aggressive triple digit gains seen through the entire market. Nearby live
cattle futures are locked in limit higher trade with the focus on buyers
stepping back into the complex after the first of the month. Hog futures are
mixed, and expected to remain that way through the rest of the session. Corn
prices are lower in light trade. September corn futures are 8 cents per bushel
lower. Stock markets are higher in light trade. The Dow Jones is 105 points
higher while Nasdaq is up 15 points.
The market that seemed to be characterized by "doom and gloom" Tuesday has
surged back with nearby contracts locked $3 per higher after hitting daily
trading limits. The aggressive nature of the market, combined with firming cash
market support and preholiday light volume is sparking a wild ride across the
cattle market Wednesday morning. Cash cattle trade has quickly shifted into
high gear with prices paid in the South and Western Nebraska at $150 per cwt
live basis. This is a $2 per cwt rally from last week's level. Although no
dressed business has been reported, bids are available as from $236 to $240 per
cwt, which would suggest a moderate shift higher over last week's prices if
this momentum holds. Asking prices are at $150 and higher per cwt in the South
and $240 and higher in the North. Beef cut-outs at midday are higher, 0.17
higher (select) and up 0.05 per cwt (choice) with light movement of 98 total
loads reported (44 loads of choice cuts, 23 loads of select cuts, 17 loads of
trimmings, 15 loads of ground beef).
Feeder cattle futures have regained most of the aggressive limit-down losses
seen Tuesday. The fact that feeder cattle futures have expanded limits through
the trading session, creates the opportunity to push markets significantly
higher than where they were before the sharp end of the month selloff.
Currently August futures are holding a $4.22 per cwt rally, while other
contracts are limiting gains to $3 to $4 per cwt. The sharp rally in live
cattle futures, combined with cash market support midweek is causing
wide-ranging volatility through the complex.
Lean hog futures are mixed as traders are once again going back to previous
market activity with nearby summer contracts trading in an opposite direction
than deferred contracts. The focus on the complex remains directed on adjusting
short-term activity based to cash markets, while adjustments are still being
surrounding potential supplies through the end of the year and in early 2016.
Cash prices are lower on the National Direct morning cash hog report. The
weighted average price fell $2.03 per cwt to $71.82 per cwt with the range from
$71.66 to $74.75 per cwt on 3,090 head reported sold. Cash prices are
unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog
report. The National Pork Plant Report reported 274 loads selling with prices
adding $0.09 per cwt. Lean hog index for 6/29 is at $77.32 down 0.32, with a
projected two-day index of $77.15 down 0.17.
Rick Kment can be reached at email@example.com
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