Livestock Futures Rally at Midday
Strong gains have quickly stepped into the livestock markets. Given the lackluster moves in grain futures and sharp outside market moves, traders are finding livestock futures attractive.
By Rick Kment DTN Analyst
GENERAL COMMENTS:
Livestock futures have broken away from the early losses Wednesday, and are posting strong triple-digit gains at midday. The lackluster moves in the grain complex and sharp outside market pressure have allowed for increased trade interest step back into livestock futures. Corn futures are trading mixed in light trade at midday. May corn futures are holding 1 cent losses at midday. Stock markets are lower in active trade. The Dow Jones is 173 points lower while Nasdaq is down 74 points.
LIVE CATTLE:
Despite the light to moderate pressure seen through the first couple hours of trade, active buying has developed. Traders quickly stepped back into the live cattle futures market near midday despite the lack of movement in the grain complex. Sharp losses are seen in other outside markets which has sparked both commercial and investment buyer interest back into the live cattle market. All nearby contracts are holding strong triple-digit gains. Cash cattle trade remains undeveloped Wednesday morning, although bids have been more available as the morning has progressed. Bids of $125 are seen in the South and $199 to $200 are available in the North. But this is still far from asking prices of $128 to $129 in the South and $205 and higher in the North. Beef cut-outs at midday are higher, $0.86 per cwt higher (select) and up $1.51 per cwt (choice) with moderate movement of 138 total loads reported (61 loads of choice cuts, 44 loads of select cuts, 4 loads of trimmings, 29 loads of ground beef).
FEEDER CATTLE:
Aggressive gains have developed in all but front-month feeder cattle futures on the electronically traded complex. The rally has been led by the surge in live cattle futures which are holding triple-digit gains at midday. The combination of firmness in the boxed beef values and potential cash market support is keeping gains solid at midday.
LEAN HOGS:
Strong gains have quickly developed in the lean hog futures market during morning trade. The pressure in the financial and energy markets seems to be drawing some moderate support back into livestock markets. June futures are holding $1.55 per cwt gain at midday, which is sparking additional volume on technical support. Cash prices are lower in moderate trade on the Iowa/Minnesota morning cash hog report. The weighted average price fell $0.57 per cwt to $78.76 per cwt with the range from $66.00 to $80.00 per cwt on 2,577 head reported sold. The National Pork Plant Report posted 263 loads at midday. Lean hog index for 4/15 is at $81.87, down 0.19 with a projected two-day index of $81.69 down 0.18.
PORK BELLIES:
The 14- to 16-pound belly markets are unreported on the midday carlot report.
Rick Kment can be reached at rick.kment@telventdtn.com
(SK)
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DTN Midday on Livestock
