DTN Midday Livestock Comments 09/18 11:47
Hog Futures Surge Higher
Aggressive market support has quickly developed in front-month lean hog
futures, drawing attention away from cattle markets Tuesday morning.
By Rick Kment
Trade in livestock futures is dominated by aggressive market support that
has pushed nearby lean hog futures to new short-term highs. October futures are
flirting with limit gains at midday. Cattle futures, on the other hand, remain
sluggish with limited activity developing in all contracts. Corn markets are
lower in light trade with September corn futures 5 cents lower. Stocks are
higher in light trade. The Dow Jones is 154 points higher while Nasdaq is up 75
Live cattle futures have trickled lower through the morning with prices 10
to 25 cents per hundredweight (cwt) lower. The overall lack of pressure in the
market seems to be focusing on the firm undertone seen late last week. The
aggressive gains in hog markets have also likely limited any buyer support in
cattle markets, as some traders are focusing all of their attention on the hog
complex. Cash cattle markets are undeveloped with no bids or asking prices
readily available at this point. It may be the last half of the week again
until significant market development are seen. Boxed beef cut-outs at midday
are mixed, $0.23 higher (select) to down $0.07 per cwt (choice) with light
movement of 67 total loads reported (39 loads of choice cuts, 17 loads of
select cuts, no loads of trimmings, 11 loads of ground beef).
Narrow losses have slowly developed through the morning Tuesday. Traders are
looking for additional market direction, but given choppy trade activity
through the week, traders seem to be unable to bring any significant movement
to the table. This is keeping prices steady to 15 cent per cwt lower in most
contracts as the potential for late-day market shifts still develops due to the
limited overall volume.
Strong gains have flooded into nearby lean hog futures trade Tuesday with
front-month October futures flirting with limit gains as prices are $2.90 per
cwt higher at midday. Triple-digit gains are seen in all nearby trade with
December and February futures trading between $1.40 and $2.50 per cwt higher.
Increased support has also developed in deferred futures based on the momentum
shift in spot contracts, but traders remain less aggressive, with prices moving
just 40 to 90 cents per cwt higher during morning activity. This may add even
more uncertainty through the rest of the week. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price is $0.89
higher at $51.55 per cwt with the range from $44.00 to $55.00 on 6,312 head
reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash
hog report. The weighted average price is $0.60 higher at $52.43 per cwt with
the range from $44.00 to $55.00 on 3,791 head reported sold. The National Pork
Plant Report posted 200 loads selling on the morning report. Pork carcass
values added $0.27 per cwt at $76.29 per cwt. Lean hog index for 9/14 is at
$53.48 up 1.63 with a projected two-day index of 54.58, up 1.10.
Rick Kment can be reached at email@example.com
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