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DTN Midday Livestock Comments 04/18 11:41
Hog Futures Slip Lower
Despite additional pork sales to China reported, traders pulled back from
earlier support as export expectations remain high. Limited movement is seen in
all markets ahead of the long weekend.
By Rick Kment
DTN Analyst
General Comments
Hog prices are mixed to mostly lower through morning trade with traders
slowly but steadily backing away from the market at the end of the week.
Additional sales of pork to China was not enough to spark buyer interest
Thursday morning. Cattle trade remains mixed with limited activity seen ahead
of the April 1 cattle on feed report. Corn futures are lower in light trade.
May corn futures are 1 1/4 cent lower. Stock markets are mixed in light trade.
Dow Jones is 109 points higher with Nasdaq down 6 points.
LIVE CATTLE:
Outside the lightly traded and soon-to-expire April live cattle futures,
which have posted a firm bounce higher, light pressure is seen through the rest
of the complex. Live cattle futures are generally steady to 20 cents lower,
indicating an overall lack of direction in the market as interest has quickly
eroded through the last couple of days. Traders seem to be showing little
interest in the upcoming cattle on feed report which will be released Thursday
afternoon. With markets closed Friday, traders will have an extra day to
process and analyze report numbers before Monday's trade. Cash cattle activity
remains sluggish with bids seen in parts of the north at $127 live and $204
dressed. Asking prices are holding at $128 to $130 live and $208 and higher
dressed. Following light to moderate trade in Kansas and Texas Wednesday at
$126 per cwt, most business is expected to be done in those areas. Cleanup
trade may develop through the end of the week, although the tone of the market
is likely set. It is uncertain if trade will develop in the North through the
afternoon after the cattle on feed report, or if both sides will have to return
Friday to finish business. Boxed Beef cut-outs at midday are mixed, $0.65 lower
(select) and up $0.45 per cwt (choice) with light movement of 54 total loads
reported (27 loads of choice cuts, 14 loads of select cuts, 4 loads of
trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Firm nearby support is slowly moving into feeder cattle trade Thursday
morning. With markets closed Friday and the release of April 1 cattle on feed
report shifting to Thursday afternoon due to the Good Friday market holiday,
traders are starting to adjust positions at the end of the week. Although
estimates expect cattle placements during March to increase, most traders feel
that these increases have already been factored into prices, and any placement
levels lower than early estimates are expected to be neutral to bullish for the
market. Limited buying may continue to trickle into the complex through the end
of the session, although the direction remains unchanged.
LEAN HOGS:
Light to moderate pressure swiftly moved through lean hog futures despite
additional pork sales to China. According to Thursday's export sales report, an
additional 23,500 metric tons of pork was sold to China. This accounts for a
two-week total of over 100,000 mt sold. The market was not encouraged by this
amount of sales reported, allowing for prices to generally erode through the
morning. Although the limited volume in the market on the last day of trade for
the week may limit interest. The fact that current price levels have apparently
factored in even larger sales is concerning. Cash prices are lower on the
National Direct morning cash hog report. The weighted average price fell $0.79
at $76.22 per cwt with the range from $71.00 to $77.47, on 6,043 head reported
sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog
report. The weighted average price fell $2.09 at $76.37 per cwt with the range
from $75.00 to $77.47, on 540 head reported sold. Pork values stabilized
Thursday with very limited volume. Pork cutouts fell $0.01 per cwt at $86.99
per cwt with 139 loads traded. Lean hog index for 4/16 is $80.24 up 0.40, with
a projected two-day index is $80.63 up 0.39.
Rick Kment can be reached at rick.kment@dtn.com
(CZ)
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