DTN Midday Livestock Comments 06/21 11:42
Weakness Continues in Hog Complex
Moderate to firm losses have redeveloped through the hog complex Thursday
morning. This is holding most nearby contracts nearly $1 per cwt lower as
traders remain concerned about fundamental support and long-term pork demand.
By Rick Kment
Light to moderate losses are seen in most livestock trade Thursday. Live
cattle futures are showing the most stability with losses seen from 20 to 50
cents per cwt through most of the morning. Hog futures continue to lead the
market lower with traders focusing on the lack of buyer support willing to move
back into the market following the sharp $5 per cwt market slide over the last
week. Corn prices are higher in light trade Tuesday. July corn futures are 2
cents higher. Stock markets are lower in light trade. The Dow Jones is 163
points lower while Nasdaq is down 40 points.
Narrow losses are holding in all cattle futures with prices seen 22 to 46
cents per cwt lower at midday due to very limited trade activity and limited
direction in the market. Traders continue to look for an indication in cash
market activity, which could add some increased volume to the market. But this
may not move price levels, or spark any additional trade volume to move through
the already quiet market structure. There is likely to be some increased
movement through the end of the week, but given the recent support in the
complex, prices may not move significantly through the remainder of June. Cash
bids have returned to the market with no significant change over the last
couple of days. Bids are seen at $108 live basis and $172 to $178 dressed. This
is not likely to spark active trade at this point with the stability in futures
and willingness of feeders to wait until the end of the week. Asking prices are
holding at $115 live and $183 dressed. Boxed Beef cut-outs at midday are mixed,
$0.37 higher (select) and down $0.89 per cwt (choice) with light movement of 53
total loads reported (27 loads of choice cuts, 15 loads of select cuts, 3 loads
of trimmings, 8 loads of ground beef).
Light market erosion is seen through feeder cattle trade through the morning
Thursday. Traders are showing increased market apathy with front month August
futures slipping $1 per cwt at midday. This overall lack of support in the
complex has little to do with wide spread market shifts or changing market
direction. The inability for strong commercial support to move back into the
market over the last couple hours and hesitancy to move prices above the $150
per cwt threshold is creating some moderate selling activity. Trade volume
through the entire complex remains extremely light, which may add uncertainty
to the entire complex over the rest of the Thursday session as well as the
remainder of the week.
Firm pressure has been seen in most hog futures with October through April
contracts holding losses near $1 per cwt at midday as the concern of demand
erosion through the next six to nine months has added even more market
pressure. Nearby contracts have posted a $5 per cwt loss through the week with
contracts testing May lows and could continue to show additional market
pressure through the rest of the month. Although August futures has not broken
through initial support of $74.25 per cwt set mid-May, the lack of buyer
support and general weakness in the complex may add even more softness to the
complex. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price is down $0.47 at $82.08 per cwt with the range from
$75.00 to $82.50 on 3,712 head reported sold. Cash prices are lower on the
Iowa/Minnesota Direct morning cash hog report. The weighted average price is
down $0.43 at $82.23 per cwt with the range from $80.75 to $82.50 on 1,197 head
reported sold. The National Pork Plant Report posted 121 loads selling with
carcass values falling $0.18 per cwt. Lean hog index for 6/19 is at $85.14 up
1.09 with a projected two-day index of $85.79, up 0.65.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.
For more free DTN information sent right to your email each morning - click here
to sign up for DTN Snapshot.