DTN Midday Livestock Comments 03/06 11:30
Record Highs Set in Lean Hog Futures
The lean hog pit continues to roll sharply higher at midday with April
through August once again setting record highs. On the other hand, the cattle
complex is struggling near the noon hour, pressured by profit-taking and signs
of cash weakness.
By John Harrington
DTN Livestock Analyst
Light cattle trade is evident near midday with Southern cattle marked at
$148, $2 lower than last week. Some business in the North has been generated at
$237, $3 lower than last week's weighted average basis Nebraska. Unsold
showlists remain priced around $152 in the South and $243 in the North. Cash
prices on the Iowa Minnesota Direct morning cash hog report are $2.27 higher
with a weighted average of $105.52. Corn futures are higher at midday. March
and May contracts are nearly 7 cents higher.
Live cattle futures are 27 to 67 lower at midday. The live pit is moderately
lower in mid-morning trade, pressured by follow-through selling, profit-taking
and signs of lower feedlot sales. It will be important to see if chart support
can hold at $143 basis spot April. Beef cut-outs at midday are higher, $1.14
per cwt higher (select) and up $1.29 per cwt (choice) with light movement of 32
loads of choice cuts, 18 loads of select cuts, zero loads of trimmings, 11
loads of ground beef.
Feeder cattle futures are 72 to 100 lower at midday. Feeder cattle contracts
are significantly lower at this time, reflecting the defensive tone of the live
pit. Besides uncertain packer spending, the feeder market is being pressured by
firming action in the corn market.
Lean hog futures are triple-digits higher at midday, up 147 to 212. Hog
bulls just keep climbing higher and higher. The first four contracts of live
hog futures are holding triple-digit gains near midday, lifted by impressive
fundamentals and fears that PED will continue to take a heavy toll on pork
production potential in the months to come. While oscillators remain extremely
overbought, that just doesn't seem to matter given the extreme bullish
psychology now rewriting hog market history. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price rose $1.38
per cwt to $103.48 per cwt with the range from $92.00 to $107.50 per cwt on
5,476 head reported sold. The National Pork Plant Report reported 151.52 loads
with the carcass cutout dropping 71 cents. Lean hog index for 3/4 is at
$100.87, up 41.92; Projected two-day lean hog index for 3/5 is $102.31, up
For more from John see http://www.feelofthemarket.com/
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