DTN Midday Livestock Comments 12/11 11:54
Lean Hog Futures Slide Lower
Aggressive pressure continues to develop in lean hog futures Wednesday.
Active pressure in wholesale pork values is putting even more uncertainty into
the complex. Cattle futures are mixed at midday with live cattle futures stuck
in a narrow range.
By Rick Kment
Lean hog futures continue to post sharp losses as additional technical
pressure develops. The fact that wholesale pork values posted sharp losses
Wednesday morning is drawing additional pressure to the lean hog complex. Corn
futures are higher at midday. March corn futures are 2 cents per bushel higher.
Stock markets are lower in light trade. The Dow Jones is 88 points lower while
Nasdaq is down 40 points.
Narrow losses have replaced the mixed trade seen earlier in the session in
nearby contract months. The bounce higher in choice boxed beef values midweek
seems to be helping to create some fundamental stability in the market. Sharp
losses in hog futures are having an effect on overall buyer interest through
the cattle complex. Cash cattle markets remain quiet with activity likely
delayed until the end of the week. It is uncertain if this will spark
additional activity before the end of the day, or if feeders will hold out
until later in the week. Asking prices remain at $134 to $135 in the South and
$210 and higher in the North. Beef cut-outs at midday are mixed, $0.39 per cwt
lower (select) and up $0.81 per cwt (choice) with active movement of 155 total
loads reported (57 loads of choice cuts, 31 loads of select cuts, 46 loads of
trimmings, 21 loads of ground beef).
Weakness in live cattle futures and rising corn prices has affected nearby
feeder cattle futures early Wednesday. This has pushed nearby futures 7 to 32
cents per cwt lower as traders are to take protection. Deferred futures are
still holding onto moderate gains with expected support through the end of
2014. It is likely that trade volume will remain subdued through most of the
session as the majority of traders watch for additional direction from outside
Strong losses continue to develop through the lean hog futures market as the
continued pressure has triggered additional technical sell stops and is causing
widespread liquidation through the complex. December contracts are nearly dead
in the water, down 22 cents per cwt due to light open interest in these
contracts. Other nearby contracts are holding triple digit losses in February
and May futures with trades looking for additional liquidation through the end
of the week. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price gained $0.30 per cwt to $77.94 per cwt with
the range from $76.00 to $80.00 per cwt on 7,350 head reported sold. Cash
prices are unreported due to confidentiality on the Iowa Minnesota Direct
morning cash hog report. The National Pork Plant Report reported 339 loads with
prices slipping $3.84 per cwt. Lean hog index for 12/09 is at 81.69 down 0.29,
with a projected two-day index of $81.35 down 0.34.
Rick Kment can be reached at email@example.com
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