DTN Midday Livestock Comments 12/04 12:00
Feeder Cattle Futures Slide Lower
Pressure in feeder cattle futures is following the firm buyer support
developing in the grain complex. Traders are looking for additional support in
meat market fundamentals, with live cattle and lean hog futures mixed at
By Rick Kment
Livestock futures are trading mixed Wednesday morning. Front-month lean hog
futures pressure is holding during the morning, despite renewed buyer interest
developing in deferred contract months. Corn futures are higher at midday.
December corn futures are 5 cents per bushel higher. Stock markets are lower in
light trade. The Dow Jones is 34 points lower while Nasdaq is down 4 points.
Light to moderate gains have developed through live cattle futures. The
expectation of firmness in outside markets as well as a boost in the morning
boxed beef values is keeping buyers cautiously optimistic at midday. Gains of 5
to 25 cents are holding through late morning, which could draw additional
interest back into the market. Cash cattle activity remains undeveloped,
although a few bids are starting to be seen in Kansas through the morning. With
bids at $129 live and $206 dressed, it is unlikely that feeders will quickly
jump into the market at this point of the week. Asking prices remain at $134 to
$135 in the South and $212 and higher in the North. It is very likely that
trade will be delayed until Thursday of Friday. Beef cut-outs at midday are
higher, $0.58 per cwt higher (select) and up $0.65 per cwt (choice) with light
movement of 99 total loads reported (46 loads of choice cuts, 22 loads of
select cuts, four loads of trimmings, 27 loads of ground beef).
Corn market gains over the last two trading sessions have had the biggest
effect on feeder cattle prices. After trading mixed through most of the morning
in a narrow range, buyer interest slowed at midday. This created moderate
pressure through the entire complex. Nearby corn prices are holding gains of 3
to 5 cents per bushel, which is creating concerns that additional advancements
in feed prices will develop over the near future.
Front-month lean hog futures continue to hold onto strong losses at midday
given the early market pressure Wednesday. Traders are focusing on the lack of
wholesale pork values over the last couple of days. This may continue to limit
spot contract support. But pressure was unable to hold through the rest of the
complex as nearby and deferred futures are holding narrow gains. Cash prices
are lower on the National Direct morning cash hog report. The weighted average
price fell $1.27 per cwt to $78.39 per cwt with the range from $77.74 to $80.00
per cwt on 4,355 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 290 loads with prices slipping $0.64 per
cwt. Lean hog index for 12/02 is at 82.25 up 0.37, with a projected two-day
index of $82.69 up 0.44.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2013 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