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DTN Midday Livestock Comments          10/15 11:52

   Traders' Attention Shifts Back to Lean Hog Market Friday

   Limited activity is noted in most livestock futures Friday morning as 
traders use the last day of the week to adjust positions following renewed 
interest in cattle. Lean hog futures have been searching for support. Renewed 
corn gains have put pressure on feeder cattle futures.

By Rick Kment, Contributing Analyst

   GENERAL COMMENTS:

   Firm gains have moved back into live cattle futures as traders confirm buyer 
support which developed Thursday, moving prices to six-week highs. The ability 
of live cattle contracts to move back to pre-Labor Day levels is expected to 
spark even more momentum through the entire complex. Hog futures have been 
trying to establish supportive price levels all week. Firmness in cash hog 
prices and pork values over the last couple of days seem to have been enough to 
entice buyers back into the complex. Feeder cattle trade is pulling back from 
previous gains, driven primarily by aggressive moves higher in corn trade, 
putting focus on higher production costs for cattle feeders. December corn is 
up 8 cents per bushel and December soybean meal is up $1.80 per ton. The Dow 
Jones Industrial Average is up 280 points with Nasdaq up 45 points.

   LIVE CATTLE:

   Firm, follow-through gains have moved back into live cattle futures Friday 
morning with traders adding Thursday's strength. This is posting six-week 
market highs and the ability to hold price levels in this range will leave 
nearby contract moves positive for the week. Combined with last week gains, 
nearby live cattle futures have rallied $4 to $5 per cwt during the first two 
weeks of October. This support is likely to be the spark needed to bring 
additional noncommercial interest back into the market. December live cattle 
futures are finding firm fundamental support since moving above the $130 per 
cwt level, which has the potential to help bring about additional support in 
cash values next week. Cash cattle activity remains quiet Friday morning with 
the bulk of trade done for the week. Although there may be some clean-up trade 
taking place in several areas, the price tone for the market appears to be set. 
Cattle left on showlists remain priced at $125 live in the South and $198 
dressed in the North. Feeders appear content carrying any additional cattle 
into next week, rather than lowering asking prices at this point. Cash prices 
for the week appear to be generally steady with last week's levels at $124 live 
and $196 dressed, but it will be interesting once average prices are listed 
Monday to see if market firmness once again developed. This could spark further 
longer-term market support and lead to a trend of higher prices through the 
rest of the year. Friday morning's boxed beef prices are higher in moderate 
trade, with choice cuts $0.97 higher at $281.29 and selects up $0.80 at $261.48 
on a total count of 101 loads. Dow Jones estimated Friday's cattle slaughter at 
109,000 -- 7,000 less than a week ago and year ago levels.

   FEEDER CATTLE:

   Feeder cattle have turned lower in Friday morning trade as strong, 
end-of-week support across the grain complex has created a shift in trader 
interest despite gains redeveloping across the cattle complex. Traders are 
focusing on overall production costs at the end of the week, but also some 
end-of-week adjustments are seen Friday following the firm market rally since 
the first of October. Traders are looking for price stability and developing a 
sustainable market range through the near future. It appears November futures 
may be finding longer-term support between $160 and $163 per cwt, building a 
stronger base to draw even more volume and commercial trade interest back into 
the complex. The CME Feeder Index was priced at $154.01 for Oct. 13.

   LEAN HOGS:

   Light to moderate gains have slowly but steadily trickled back into lean hog 
futures Friday. Following a week of lower moving markets, traders took the 
Friday session to adjust positions. Given current price levels in futures, and 
building support in wholesale pork cuts, it appears nearby lean hog futures are 
at or near support levels. The perception of a slow but deliberate change in 
market direction is likely enough to spark follow-through buyer support early 
next week. Traders are closely following nearby contract months as this will 
focus on demand levels through the end of the year. In addition, the shifting 
supply and demand situation during the first half of 2022 is helping stimulate 
late-week buyer interest. Cutouts are down $1.07 at $104.99 Friday morning on 
211.65 loads. Negotiated hog prices are $0.74 lower at $67.94 per cwt on 4,917 
head. The swine/pork market formula price is listed at $86.88 per cwt. Dow 
Jones estimated Friday's hog slaughter at 474,000 -- 2,000 less than a week ago 
and 8,000 less than year ago levels. The CME Lean Hog Index is listed at $87.59 
per cwt for Oct. 14.

   Rick Kment can be reached kmentrick@gmail.com




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