DTN Midday Livestock Comments 01/13 11:58
Triple-Digit Gains Flood Into Cattle Futures
Late-week support quickly developed in cattle markets Friday afternoon. This
has pushed live cattle and feeder cattle markets triple digits higher, with the
potential for additional support holding into next week.
By Rick Kment
DTN Livestock Analyst
Strong gains have quickly developed in cattle futures at midday with the
most contracts holding triple-digit gains despite early morning pressure. Lean
hog futures are mixed in a narrow range. The focus on markets remaining closed
Monday is putting more emphasis on Friday's trade movements, even though volume
remains light. Corn prices are lower in light trade. March corn futures are 1
cent lower. Stock markets are mixed in light trade. The Dow Jones is 18 points
lower while Nasdaq is up 30 points.
Strong triple-digit gains have quickly moved into the live cattle futures
complex at midday Friday as traders try to square positions in front of the
long holiday weekend. The firmness in beef values at the end of the week gives
signs that support may be redeveloping across the complex. Nearby futures are
holding $1 to $1.30 per cwt gains at midday, although trade volume remains
extremely sluggish with most traders already out of the complex. But the
ability to close February futures above $118.50 per cwt for the week would
likely help draw additional attention to the market through early next week.
Cash cattle markets remain undeveloped at midday Friday, with just a few
scattered bids redeveloping at previous price levels. Bids are available at
$116 in the South and $186 in the North, with the expectation that trade will
develop sometime through the afternoon. Asking prices are holding at $120 and
higher in the South and $190 in the North. Beef cut-outs at midday are higher,
$0.38 higher (select) and up $1.34 per cwt (choice) with light movement of 63
total loads reported (34 loads of choice cuts, 21 loads of select cuts, 1 load
of trimmings, 7 loads of ground beef).
Strong gains have developed across most feeder cattle futures at midday
despite the overall lack of market direction through most of the morning.
Traders have moved into a position-squaring attitude with short covering
developing after sharp losses developed over the last couple of trading
sessions. There may be some additional market shifts in the late minutes of
trade, but overall trade volume is slowing significantly ahead of the weekend
break, which may allow prices to close firmly higher.
Lean hog futures continue to be stuck in a narrowly mixed trading range with
prices hovering from 30 cents lower to 30 cents higher during late morning. The
inability to draw firmer cash market support in the morning report was offset
by the aggressive surge in pork values. Trade volume in the lean hog complex
remains at a near standstill, although there is likely to be some aggressive
open interest gains once again Friday similar to the support seen through the
week. With markets closed Monday, it is likely that many traders are focusing
on the late-Friday moves to square positions ahead of the weekend. Cash prices
are higher on the National Direct morning cash hog report. The weighted average
price fell $0.99 at $60.21 per cwt with the range from $58.33 to $62.00 on
3,045 head reported sold. Cash prices are lower on the Iowa Minnesota Direct
morning cash hog report. The weighted average price fell $1.63 at $60.83 per
cwt with the range from $58.33 to $62.00 on 1,005 head reported sold. The
National Pork Plant Report reported 137 loads selling with prices adding $2.83
per cwt. Lean hog index is unreported at this time.
Rick Kment can be reached at firstname.lastname@example.org
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