DTN Midday Livestock Comments 09/19 11:58
October Hog Futures Skyrocket Higher
Strong price rebounds are seen in front-month October lean hog futures. This
significant shift from the previous day is creating widespread short-covering
opportunities. Cattle futures remain mixed in light trade.
By Rick Kment
Strong gains have redeveloped in front-month lean hog futures with traders
retracting losses seen Thursday. It is uncertain if these gains will hold
through closing bell given the light trade volume through the entire complex.
Cattle trade is mixed in live cattle futures with the focus on the upcoming
cattle on feed report released Friday afternoon. Corn futures are lower at
midday. December corn futures are 5 cents per bushel lower. Stock markets are
mixed in light trade. The Dow Jones is 25 points higher while Nasdaq is down 24
Mixed trade is seen through live cattle contracts midday Friday with narrow
losses holding in October and December contacts. Moderate support is seen in
February and April contracts through late morning, although most of traders
focus continues to be based on the direction of cash cattle trade at the end of
the week as well as potential shifts in cattle supplies reported on the cattle
on feed report. Cash cattle activity remains sluggish with a few additional
bids starting to develop in both the North and South. Bids of $155 can be had
in the South, while dressed bids in the North are at $245 per cwt. It is likely
that active trade could be delayed until after the cattle on feed report.
Asking prices are seen at $162 to $164 in the South and $254 and higher in the
North. Beef cut-outs at midday are lower, $1.45 per cwt lower (select) and down
$0.34 per cwt (choice) with light movement of 81 total loads reported (35 loads
of choice cuts, 21 loads of select cuts, eight loads of trimmings, 16 loads of
Nearby contract months have been able to slowly but steadily gain momentum
through morning trade. Traders are focusing on the potential of lighter than
expected placements in August. This has pushed September through January
futures over $1 per cwt higher in anticipation of a bullish report. Trade is
likely to remain sluggish through the end of the session with light to moderate
support seen in feeder cattle futures, but for the most part, traders are
content holding these gains into the weekend break.
The wild shifts that have been commonplace in the lean hog futures markets
over the last few weeks have once again not disappointed market watchers.
Through the day Thursday nearby futures traded at or near limit lows, all to
reverse the trend and hold aggressive near limit highs through the morning
Friday. October futures are trading $2.77 per cwt higher, which is creating
some additional uncertainty and questioning any fundamental reasoning about
longer term supply and demand. Beyond nearby contract gains, it has been hard
to find much activity at all through the rest of the complex allowing current
positions to hold into the weekend. Cash prices are lower on the National
Direct morning cash hog report. The weighted average price fell $2.81 per cwt
to $100.01 per cwt with the range from $98.00 to $104.00 per cwt on 1,565 head
reported sold. Cash prices are unreported due to confidentiality on the Iowa
Minnesota Direct morning cash hog report. The National Pork Plant Report is
reported 127 loads selling as prices adding $0.31 per cwt. Lean hog index for
9/17 is at $104.74 up 0.59, with a projected two-day index of $105.14 up 0.40.
Rick Kment can be reached at firstname.lastname@example.org
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