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DTN Midday Livestock Comments          11/21 11:56

   Cattle Futures Surge Higher Late Morning   

   Building support surrounding the expectations of lower cattle placements in 
the cattle on feed report and expected support in cash cattle markets once the 
dust clears from the weekly trade is drawing futures higher at midday. Lean hog 
futures remain mixed in a wide and undirected range. 

By Rick Kment
DTN Analyst


   Strong gains have redeveloped across the cattle complex late Friday morning 
as traders focus on both the potential impact of the upcoming cattle on feed 
report on futures prices, but also the expectation that cash cattle trade will 
remain steady to firm from last week's levels. Trade in cash markets is still 
undeveloped, but is creating even more expectations the farther into the day it 
takes before activity is seen. Corn prices are higher in light trade. December 
corn futures are 1 cent per bushel lower. Stock markets are higher in light 
trade. The Dow Jones is 87 points higher while Nasdaq is up 21 points.


   Early pressure has evaporated through the live cattle futures as traders not 
only try to prepare for the afternoon cattle on feed report, but also are 
pointing to steady to firm potential in cash cattle trade. Deferred futures are 
once again setting new contract highs, which puts more emphasis on the 
longer-term support in the market and expectations that supplies will remain 
tight over the next year. Cash cattle activity is still in the yet to be 
determined category with bids slowly developing through the morning. Bids are 
seen around $168 in the South and $263 to $265 in the North. Although these are 
nearing last week's average in the North, it is still not enough at this point 
to get feeders interested in pulling the trigger. It could easily be late 
afternoon before cash trade develops. Asking prices are holding at $174 in the 
South and $270 and higher in the North. Beef cut-outs at midday are higher, 
$0.34 higher (select) and up $0.26 per cwt (choice) with light movement of 47 
total loads reported (23 loads of choice cuts, 11 loads of select cuts, zero 
loads of trimmings, 13 loads of ground beef).


   Feeder cattle trade has turned higher midday following the renewed support 
in live cattle futures. There is additional pre-report positioning likely to be 
taking place, although the overall volume in the market remains sluggish. 
Nearby contracts are tightly grouped with prices hovering from 57 to 70 cents 
per cwt. This could draw additional support back into the market in deferred 
contracts as well as firm support through the live cattle complex. 


   Price levels in the lean hog futures market are expanding, but in both 
directions, which is creating even more price shifts through the complex and 
limiting any sense of direction between nearby and deferred futures trade. 
Prices in December and February futures are holding 50 to 55 cent per cwt 
losses, while gains in mid to late 2015 contracts are holding strong gains. The 
light trade volume expected to continue through the remainder of the session 
will likely keep prices scattered throughout the wide range. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price fell $0.34 per cwt to $84.20 per cwt with the range from $75.00 to $85.00 
per cwt on 2,890 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa Minnesota Direct morning cash hog report. The 
National Pork Plant Report is reported 154 loads selling as prices fell $0.74 
per cwt. Lean hog index for 11/19 is at $88.95 up $0.20, with a projected 
two-day index of $88.86 down 0.09.

   Rick Kment can be reached at 


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