DTN Midday Livestock Comments 06/26 12:07
Cattle Markets Rally Higher at Midday
Sharp gains develop in cattle futures midday Monday which is leading to
aggressive triple digit rallies through late day trade. The ability to spark
market support at this point in the week could bring additional buyer activity
back to the market through the rest of the week.
By Rick Kment
Sharp gains in cattle futures seen midday have created a welcome surprise to
the market which started out with a defensive tone. This lack of support
through the complex continues to focus on the potential for increased market
activity through the rest of the session with the potential of hitting trading
limits before closing bell. Corn prices are higher in light trade. July corn
futures are 1 cent lower. Stock markets are higher in light trade. The Dow
Jones is 41 points higher while Nasdaq is up 2 points.
Triple-digit gains continue to hold in live cattle market following the
morning surge in feeder cattle trade which is helping to pull live cattle
futures higher at midday. The potential for limit higher trade activity is
starting to develop following what seemed to be a bearish start and created
some concerns that increased cattle placements would weaken the overall long
term outlook of the market for the rest of the summer. August futures currently
lead the complex higher with gains of $2.60 per cwt as traders try to keep up
with sharp gains in feeder cattle markets. Cash cattle activity is undeveloped
with show list distribution and inventory taking the main order of business of
the day. Bids and asking prices may be delayed until midweek. Beef cut-outs at
midday are higher, $2.08 higher (select) and up $0.03 per cwt (choice) with
light movement of 71 total loads reported (38 loads of choice cuts, 10 loads of
select cuts, 16 load of trimmings, 7 loads of ground beef).
Aggressive buyer support has taken over at midday across feeder cattle trade
with August futures holding a $3 per cwt rally. This move counters early
morning losses that focused on the bearish cattle on feed report and increased
placement levels seen on the Friday report. But the inability for traders to
continue to hold the market lower has quickly allowed a flurry of buyer
activity to move back into the market and active triple digit support to move
back into the complex. It is uncertain just how much long-term support will
develop through the complex as traders will continue to focus on feeder cattle
buyer interest through the day.
Overall lack of trade volume has been seen though most of the morning with
firm gains holding across the lean hog complex. July futures continue to be
only contract to hold triple digit gains. Even though front-month futures have
backed away from session highs, the ability to focus on bullish fundamental
support continues to keep commercial traders active in the market as well as
looking for increased market support through the end of the month. Cash prices
are lower on the National Direct morning cash hog report. The weighted average
price fell $0.95 at $84.85 per cwt with the range from $82.00 to $86.00 on
3,045 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct
morning cash hog report. The weighted average price fell $2.77 at $83.57 per
cwt with the range from $82.00 to $86.00 on 35 head reported sold. The National
Pork Plant Report reported 127 loads selling with prices adding $0.12 per cwt.
Lean hog index for 6/22 is at $90.17 up $0.87 with a projected two-day index of
$90.62 up $0.45.
Rick Kment can be reached at firstname.lastname@example.org
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