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DTN Midday Livestock Comments 05/23 12:02
Livestock Futures Slide Lower
Cash activity continues to slowly develop in the cattle market. This is
adding pressure to futures markets at midday. Lean hog futures also remain
aggressively lower.
By Rick Kment
DTN Analyst
GENERAL COMMENTS:
Livestock future are trading sharply lower at midday as buyer support has
evaporated through the morning. The feeder cattle complex is leading the surge
lower with midday losses of $1 per cwt or greater in most contract months. Corn
futures are higher at midday. July corn futures are holding 9 cent gains at
midday. Stock markets are lower in light trade. The Dow Jones is 4 points lower
while Nasdaq is down 7 points.
LIVE CATTLE:
The combination of strong gains in the grain complex as well as mixed boxed
beef values and weaker feeder cattle futures has let to active selling
pressure. Despite the ability to hold trading ranges in a tight pattern early
in the session, moderate to sharp losses developed at midday. Cash cattle
activity is starting to develop with light trade seen in the North at $202 per
cwt. There is also light trade in the south at $124 per cwt. This is $1 per cwt
lower than last week. Beef cut-outs at midday are mixed, $0.54 per cwt lower
(select) and up $0.15 per cwt (choice) with light movement of 97 total loads
reported (39 loads of choice cuts, 35 loads of select cuts, 11 loads of
trimmings, 11 loads of ground beef).
FEEDER CATTLE:
Strong losses quickly developed in the feeder cattle futures market at
midday. The break from the narrowly mixed trade early in the session created a
lack of buyer interest and quickly allowed nearby futures to post triple-digit
losses in most nearby and all deferred contract markets.
LEAN HOGS:
Initial support seen in the lean hog futures market has quickly eroded given
the lack of support through the rest of the livestock market and weakness in
cash hog prices and pork values in the morning reports. Nearby contracts are
holding losses of 50 to 75 cents per cwt. This lack of support may draw
additional late-day pressure due to buyers starting to check out for the week.
Cash prices moved lower on the National Daily Direct morning cash hog report.
The weighted average price fell $0.41 per cwt to $89.73 per cwt with the range
from $81.00 to $91.50 per cwt on 3,590 head reported sold. The National Pork
Plant Report posted 144 loads at midday with carcass values falling $0.34 per
cwt. Lean hog index for 5/21 is at $93.44 up 0.15 with a projected two-day
index of $93.49 up 0.05.
Rick Kment can be reached at rick.kment@telventdtn.com
(SK)
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