DTN Midday Livestock Comments 06/19 11:41
Sharp Gains Develop Wednesday
Trade activity remains moderate through the morning with active buyer
holding at midday. Triple-digit gains are seen in all nearby livestock futures.
This could help to draw additional interest through the rest of the session.
By Rick Kment
Strong gains have developed in the livestock market with nearby futures
holding strong triple-digit gains. There is no development in cash cattle
activity, but traders are focusing on outside market support through the day
Wednesday. Corn futures are higher at midday. July corn futures are holding 5
cent gains at midday. Stock markets are lower in light trade. The Dow Jones is
24 points lower while Nasdaq is down 7 points.
What started out as weak trade in a narrow range early in the session has
developed into moderate buyer support focused on outside market movement.
Traders are looking for some additional market direction, but it seems that
many are not focusing closely on beef value shifts early in the day. Strong
triple digit gains are seen at midday. This could spark increased commercial
and investment volume to step back into the market. But trade remains range
bound for now. Cash cattle activity remains undeveloped Wednesday morning. It
appears that activity will be pushed to Thursday at least. Given the market
delays the last couple of weeks it is not unlikely that trade won't happen
until Friday afternoon. Asking prices are holding at $122 to $123 per cwt in
the South and $198 and higher in the North. Beef cut-outs at midday are lower,
$0.11 per cwt lower (select) and down $1.46 per cwt (choice) with moderate
movement of 139 total loads reported (56 loads of choice cuts, 45 loads of
select cuts, 11 loads of trimmings, 26 loads of ground beef).
Moderate to strong support developed through the feeder cattle complex
despite strong gains seen in the corn market. The overall widespread gains in
commodity markets seem to have helped to draw buyers back into the cattle
complex on Wednesday. This is pushing front-month futures nearly $1 per cwt
higher at midday. It is still questionable if the activity level in the market
will be able to sustain the morning price support.
Strong triple-digit gains are holding through the nearby contract months at
midday. Gains have fallen back slightly from session highs seen midmorning, but
the focus on potential short term strength in pork values is keeping buyers
active through the morning. It is still uncertain if the current buyer activity
will be able to hold current values through the end of the session. Cash prices
are lower on the National Daily Direct morning cash hog report. The weighted
average price fell $0.96 per cwt to $98.32 per cwt with the range from $89.50
to $99.00 per cwt on 2,903 head reported sold. The National Pork Plant Report
reported 268 loads with prices gaining $0.14 per cwt. Lean hog index for 6/17
is at $103.28 up 0.79 with a projected two-day index of $103.87 up 0.59.
Rick Kment can be reached at email@example.com
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