DTN Midday Livestock Comments 01/19 11:53
Moderate to Strong Losses Develop Friday Morning
Narrow pressure seen early in the market has limited trade activity through
the complex. This may bring additional uncertainty to the entire trade.
Triple-digit losses are holding in feeder cattle trade.
By Rick Kment
Pressure is seen in all livestock markets with aggressive triple-digit
losses in feeder cattle markets leading the complex lower. Although trade is
still sluggish, the overall lack of follow-through buying activity may bring
additional uncertainty to the market. Corn prices are higher in light trade.
March corn futures are 1/4 cent higher Friday. Stock markets are mixed in light
trade. The Dow Jones is 54 points lower while Nasdaq is up 24 points.
Narrow to moderate losses have developed across the live cattle futures.
There is likely to be some additional market shifts seen in the last couple
hours of trade, although most traders may focus on increased trade volume over
the next couple of weeks. The strong gains seen earlier in the week has also
put more emphasis on the desire and need to spark some additional trade volume
and square positions before the weekend. Cash cattle sales are still
undeveloped Friday, although trade still needs to be done before either side
can call it a week. This may add to the uncertainty in futures trade as packers
are unwilling to aggressively increase bids at this point. Live bids are seen
at $118 in the North and South, while dressed bids are holding at $192 to $194
per cwt. Asking prices are seen at $124 and higher live and $195 to $197
dressed basis. Boxed Beef cut-outs at midday are lower, $0.48 lower (select)
and down $0.58 per cwt (choice) with light movement of 67 total loads reported
(41 loads of choice cuts, 12 loads of select cuts, 9 loads of trimmings, 6
loads of ground beef).
Triple-digit losses have quickly developed across the complex late Friday
morning. The inability to bring back the buyer support seen over the past two
trading sessions has created underlying position taking with nearby contracts
holding losses of $1 to $1.30 per cwt. The follow through weakness seen in live
cattle markets through the morning may continue to add softness to the entire
cattle trade, and push feeder cattle futures even lower.
Mixed trade is seen midday Friday with traders focusing on the overall lack
of buyer support willing to move into the market. There is growing support for
market stability in deferred contracts, while the weakness that has moved into
the cattle trade is starting to erode overall market gains through the rest of
the trading session. February futures are trading 75 cents per cwt lower with
the rest of the market stuck in a narrow range. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price is up $0.13
at $69.84 per cwt with the range from $63.50 to $71.50 on 5,243 head reported
sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog
report. The weighted average price is up $0.02 at $69.90 per cwt with the range
from $66.50 to $71.50 on 2,695 head reported sold. The National Pork Plant
Report posted 146 loads selling with carcass values adding $0.19 per cwt. Lean
hog index for 1/17 is at $73.55 up $0.56 with a projected two-day index of
$73.67, up $0.12.
Rick Kment can be reached at firstname.lastname@example.org
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