DTN Midday Livestock Comments 04/25 12:01
Lean Hog Markets Expand Wide Gains Tuesday
Active buying continues to develop in lean hog trade as nearby contracts
post gains near $2.50 per cwt in June and July contracts. This is allowing for
aggressive market support to redevelop across the entire complex. Firm buyer
support is holding in live cattle futures midday Tuesday, although buyer
support remains moderate at best due to light volume.
By Rick Kment
Follow through gains have developed through the livestock market with lean
hog trade leading the complex higher. This move higher in the hog market is
causing the most surprise in the market with the potential for limit higher
price moves in nearby contracts. Cattle markets are moderate at best, but the
firmness in the market is a positive change following the sharp early week
pressure seen Monday. Corn prices are higher in light trade. May corn futures
are 6 cents higher. Stock markets are higher in light trade. The Dow Jones is
236 points higher while Nasdaq is up 40 points.
Firm buyer support is seen across live cattle futures with traders looking
for additional buyer activity during the last couple hours Tuesday. Following
sharp losses Monday, futures have regained market support and the potential to
regain the momentum seen last week. Even though some uncertainty seems to be
seen in boxed beef values over the last couple of days, there is still strong
consumer support developing in the cattle market as traders are looking for
traders to move back into both nearby and deferred contracts through the end of
the month. Cash cattle markets remain inactive with bids and asking prices both
undeveloped and poorly defined Tuesday morning. The expectation that most
interest will be pushed into the second half of the week will likely move the
emphasis to keep most packers on keeping bids from developing until Wednesday
or later. At this point it is uncertain if feedlot managers are waiting to see
if packers are willing to offer bids before establishing firm asking prices, or
if they are focusing on the movement in the futures market before setting the
asking price levels for the week. Beef cut-outs at midday are mixed, $2.13
higher (select) and down $0.20 per cwt (choice) with light movement of 68 total
loads reported (35 loads of choice cuts, 9 loads of select cuts, 15 loads of
trimmings, 9 loads of ground beef).
Feeder cattle futures have turned mixed at midday after holding firm gains
through the entire morning. The inability to draw additional buyer support at
midday may create some underlying concerns not only late in the day, but
through the rest of the week. May futures are the only contract holding losses
at the current time with all other futures trading 50 to 90 cents higher. This
may spark additional buyer support through the rest of the complex.
Follow through buyer support has continued to quickly develop across all
nearby lean hog futures as traders moved into the complex. The combination of
higher cash hog trade in the morning report added to the increased support
through the complex and is pushing nearby support to gains nearing $2 per cwt.
The overall support may quickly not only pull prices off of support levels, but
give commercial traders a springboard to move into the spring and summer
markets which could build into additional market momentum. Cash prices are
higher at midday on the National Direct morning cash hog report. The weighted
average price added $0.27 at $53.72 per cwt with the range from $49.00 to
$54.50 on 5,459 head reported sold. Cash prices are higher on the Iowa
Minnesota Direct morning cash hog report. The weighted average price added
$0.29 at $54.24 per cwt with the range from $49.00 to $54.50 on 2,920 head
reported sold. The National Pork Plant Report reported 199 loads selling with
prices fell $0.51 per cwt. Lean hog index for 4/21 is at $60.49 down $0.61 with
a projected two-day index of $60.16 down $0.33.
Rick Kment can be reached at firstname.lastname@example.org
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