DTN Midday Livestock Comments 03/18 11:48
Light Gains Curbed By Market Uncertainty
Mixed trade has held through the entire morning in hog and cattle trade with
traders still focusing on market firmness based on last week's gains. But the
inability to sustain significant buyer interest early morning has kept price
shifts well contained.
By Rick Kment
Mixed trade is seen through the entire livestock complex with continued
gains redeveloping in nearby lean hog trade with April futures holding a
triple-digit rally at midday. Cattle markets remain focused on the overall
uncertainty of follow-through buyer support, with traders containing prices
within current market ranges through most of the morning. Corn futures are
lower in sluggish trade. May corn futures are 2 cents lower. Stock markets are
lower in light trade. Dow Jones is 25 points lower with Nasdaq down 2 points.
Moderately mixed trade ranges have held through live cattle trade Monday
morning with traders holding prices from 47 cents lower to 50 cents higher.
Most of the activity has developed in nearby contracts as April and June
futures are showing the greatest adjustment. With so much unknown about the
impact of flooding and how this will impact cattle in feed yards as well as the
cow/calf operations in many of these areas, traders continue to hover within
the current market range which is likely to hold over the next several days.
Cash cattle interest remains undeveloped with packers and feeders starting the
weekly dance of show list distribution and inventory taking. Transportation
issues are likely to be a major issue even if cash business gets done due to
many flooded and damaged roads through the upper midwest. Boxed Beef cut-outs
at midday are higher, $0.70 higher (select) and up $1.25 per cwt (choice) with
light movement of 37 total loads reported (17 loads of choice cuts, 6 loads of
select cuts, 5 loads of trimmings, 9 loads of ground beef).
Limited interest is seen in feeder cattle trade with prices hovering from 40
cents lower to 45 cents higher in choppy up and down trade through the morning.
The limited support in live cattle trade early Monday has helped to rekindle
some buying activity, but the momentum of strong triple digit gains seen late
last week seems to have quickly passed. Traders continue to try to balance
short- and long-term market direction given the weather conditions and flooding
conditions, impacting the upper half of cattle country. This could create more
questions than answers over the near future, allowing for increased market
Firm buyer support is slowly but steadily moving through the complex Monday,
although most contracts have pulled back from initial triple digit gains which
developed early Monday morning. Commercial buyer support has moved back into
April lean hog trade, moving prices $1.50 per cwt, with prices shifting above
$70 per cwt for the first time since mid-December. This may allow for
additional late-day buying activity through most contracts. At this point,
there appears limited aggressive buying on the sidelines which would move gains
to expanded trading limits in the last hour of trade activity. This could help
to bring steady but more stable buyer activity into the complex through the end
of the week. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price added $1.09 at $55.01 per cwt with the range
from $48.00 to $58.00 on 6,220 head reported sold. Cash prices are higher on
the Iowa/Minnesota Direct morning cash hog report. The weighted average price
added $1.39 at $56.87 per cwt with the range from $50.00 to $58.00 on 2,360
head reported sold. Pork carcass values continue to gain momentum with strong
triple-digit gains developing in most primal cuts. Pork cutouts gained $1.10
per cwt at $69.99 per cwt with 135 loads traded. Lean hog index for 3/14 is
$55.40, up $1.27, with a projected two-day index is $56.54, up $1.14.
Rick Kment can be reached at firstname.lastname@example.org
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