DTN Midday Livestock Comments 05/22 12:13
Cattle Futures Surge Higher Monday
Feeder cattle futures quickly shift higher as traders adjust to the
additional support moving into the market Monday. The expectation is that
increased activity will continue to develop through the week as cash markets
develop ahead of the holiday week.
By Rick Kment
Strong buyer support has quickly moved back into the live cattle and feeder
cattle markets Monday morning. This support is quickly redeveloping the
expectation that increased activity is seen in commodity markets and triple
digit gains can spark the interest of commercial traders at the end of the
month. Corn prices are higher in light trade. July corn futures are 3 cents
higher. Stock markets are higher in light trade. The Dow Jones is 87 points
higher while Nasdaq is up 40 points.
Buying activity in the live cattle futures trade continues to move be driven
by the feeder cattle complex. This support is currently driven by a $1 to $1.50
per cwt rally in August through April contracts as markets firm through the
complex. June futures have pulled away from session highs, but remain above
$124 per cwt at midday. The ability to trade above $125 per cwt for a portion
of the morning is bringing additional longer term commercial buyer support back
to the market Monday morning. Cash cattle markets remain undeveloped following
the lower cash markets last week with bids and asking prices unavailable early
in the week. Show lists are smaller heading into the week as packers look for
the upcoming holiday weekend of lighter procurement schedules to limit overall
deliveries next week. This could limit overall movement and overall activity in
many areas. Beef cut-outs at midday are higher, $1.09 Higher (select) and up
$0.64 per cwt (choice) with light movement of 67 total loads reported (23 loads
of choice cuts, 21 loads of select cuts, 15 loads of trimmings, 7 loads of
Feeder cattle futures have posted an aggressive triple digit rally early
Monday morning with traders building on the support seen Friday. Even though
May futures remain sluggish, all other contracts have posted aggressive buyer
support with August through October contracts holding gains between $2 to $2.50
per cwt. There continues to be uncertainty if there will be increased volume
moving into the market through the end of the day and if these prices will be
able to hold through closing bell. Because many times strong gains at midday
have quickly faded in the last few minutes of trade due to light trader volume.
A bullish support through the week could spark renewed fundamental support and
bring increased long-term support through the entire cattle market.
Lean hog futures remain mixed in light trade as trades continue to focus on
light commercial buyer support slowly moving back into the lean hog complex.
July and August futures are leading the market higher with a 30 to 50 cent gain
holding the complex together although the focus on July contracts moving above
$80 per cwt seems to be the highlight of the hog market Monday morning. The
rest of the complex is unwilling to take a stand on which way to move as very
little fundamental direction is developing early in the week. Cash prices are
lower on the National Direct morning cash hog report. The weighted average
price lost $0.67 at $70.17 per cwt with the range from $69.00 to $71.00 on
3,128 head reported sold. Cash prices are lower on the Iowa Minnesota Direct
morning cash hog report. The weighted average price lost $1.05 at $70.29 per
cwt with the range from $69.00 to $71.00 on 348 head reported sold. The
National Pork Plant Report reported 110 loads selling with prices adding 0.57
per cwt. Lean hog index for 5/19 is at $75.55 up $0.63 with a projected two-day
index of $75.89 down $0.34.
Rick Kment can be reached at firstname.lastname@example.org
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