DTN Midday Livestock Comments 04/20 11:58
Cattle Futures Struggle at Midday With Triple-Digit Losses
Live and feeder cattle contracts are sharply lower near the noon hour,
swamped by long liquidation and technical selling. On the other hand, lean hog
futures are only moderately lower near midday, somewhat supported by ideas of
wholesale pork benefiting from defensive beef buying.
By John Harrington
DTN Livestock Analyst
Cattle buyers are collecting new showlists this morning but saying virtually
nothing about short-term spending potential. The fed offering seems to be
generally larger than last week, especially in Nebraska. A few asking prices
have been thrown out around $163 in the South and $263-plus in the North.
According to the midday report, the Iowa hog base is not quotable due to rules
of confidentiality. The corn market is 1-2 cents lower near the top of the noon
hour in slow and rather featureless trading. U.S. stocks are up more than 1%
this morning amid an unexpected stimulus from China's central bank as investors
kept eyeing corporate earnings. The Dow is 220 points higher at this time with
the Nasdaq positive by 74.
Futures are off 137 to 313. The live pit is getting hammered again today
thanks to technical selling and long liquidation. The fact that the board seems
to be ignoring the premium status of feedlot business suggests that many
traders suspect that the spring top in cattle feeding country has come and
gone. Beef cut-outs are higher at midday, up $0.92 (choice, $258.71) to $1.59
(select, $252.56) with light box movement (43 loads of choice cuts, 10 loads of
select cuts, zero loads of trimmings, 16 loads of ground beef).
Futures are off 150 to 400. Feeders are imploding along with their live
counterparts, oblivious to the towering reality of the cash index. Bears may be
growling enough at this point to test chart support at 200. On an estimated run
of 5,500 head (down from 8,024 last week and 6,069 in 2014), Oklahoma City is
selling steers and heifers mostly steady to weak in a light test.
Futures are mostly 10 to 82 lower. Lean hog traders are watching the
defensive action in the cattle complex with caution at midday. Here are signs
that we are ready to step into more manageable fundamentals over the next 30-60
days, both in terms of supply and demand. But such positive thoughts are
talking a backseat today to the ugly fallout in the cattle pits. The carcass
value is generally steady at midday with higher fresh cuts offsetting picnic
and belly weakness. Pork cut-out: $68.09, up $0.10. CME cash lean 04/16:
$63.73, up $0.75 (DTN Projected lean index for 04/17: $64.27, up $0.54).
John A. Harrington can be reached at firstname.lastname@example.org
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