DTN Midday Livestock Comments 11/16 12:17
Limit Gains Develop in Hog Futures
Prices surged higher with nearby lean hog futures locked in limit gains at
midday. The widespread support is testing short-term resistance levels, with
additional potential buyer support likely Monday.
By Rick Kment
Cash cattle activity is starting to trickle into the market with a few sales
holding prices generally $2 per cwt lower than last week. This may spark
additional support late in the day. Hog futures have surged higher with buyers
moving prices back above short-term resistance levels Friday morning. Corn
markets are lower in light trade. December corn futures are 2 cents lower.
Stock markets are mixed in light trade. The Dow Jones is 89 points higher while
Nasdaq is down 30 points.
Mixed trade is seen through the live cattle complex with very limited
direction seen through the last half of the week. Traders continue to focus on
lackluster developments in beef values and cash cattle markets at this point
late in the week, but this is not breaking down most contract months. Nearby
futures are holding light to moderate support, while pressure in summer 2019
contracts is limiting widespread support. Cash cattle trade is starting to
slowly develop in the North midmorning Friday with a few scattered sales seen
at $178 dressed basis in Nebraska. This is about $2 per cwt lower than last
week, but the limited trade seen so far, may not be enough to establish a trend
for the week at this point. Bids are seen in other areas with bids from $109 to
$112 live and $176 dressed. The lower end of this live range is seen in the
South. Asking prices are at $116 to $117 live basis, and $180 dressed. More
activity is expected to develop through the afternoon. Boxed Beef cut-outs at
midday are lower, $0.02 lower (select) and down $0.22 per cwt (choice) with
light movement of 42 total loads reported (24 loads of choice cuts, 6 loads of
select cuts, no loads of trimmings, 12 loads of ground beef).
Firm pressure is seen in a very lightly traded feeder cattle complex with
front month January futures now holding a $1.07 per cwt loss. The expiration of
November contracts Thursday is now putting more focus on the January contract
which is trading in a much more consistent pattern with other nearby contracts
than the previously sluggish November futures. Limited activity is expected to
be seen through the end of the session with traders allowing late week pressure
to move back into the complex.
Sharp gains have quickly flooded through lean hog futures trade Friday
morning. February and April futures are currently locked in limit higher trade
of $3 per cwt with spot month December contracts hovering just under that level
with a $2.97 per cwt rally. If prices are able to hold these levels, expanded
trader limits will be seen Monday. The focus on firming demand through the end
of the year and early 2019 has once again gained the attention of late week
traders. Cash prices are unreported due to confidentiality on the National
Direct morning cash hog report. Cash prices are unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. The
National Pork Plant Report posted 230 loads selling on the morning report. Pork
carcass values added $0.32 per cwt at $68.99 per cwt. Lean hog index for 11/14
is $59.86, down 0.61, with a projected two-day index of $59.10, down 0.76.
Rick Kment can be reached at firstname.lastname@example.org
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