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DTN Midday Livestock Comments          04/17 11:51

   Sharp Losses Hold in Cattle Trade 

   Aggressive price pressure is seen in live cattle and feeder cattle futures 
Thursday morning. The lack of support in the complex continues to create end of 
the week protection taking. 

By Rick Kment
DTN Analyst


   Moderate-to-strong buyer support is seen in June through August lean hog 
futures following firming longer term demand support. Cattle futures are 
quickly moving in the other direction posting triple digit losses in nearby 
futures contracts. End-of-week positioning seems to be the main priority of 
most traders. Corn futures are lower at midday. May corn futures are 4 cents 
per bushel lower. Stock markets are mixed in light trade. The Dow Jones is 5 
points lower while Nasdaq is up 5 points.


   Initial early pressure which developed in the live cattle market, have 
expanded near midday. This has led to all nearby live cattle futures holding 
aggressive triple-digit losses. The feeder cattle futures continue to lead the 
market lower, but with being closed Friday, many traders are willing to take 
protection in front of the long Easter weekend break. Trade volume is expected 
to remain light through the end of the session, although trading ranges are not 
likely to move from current levels. Cash cattle markets are starting to develop 
with light trade seen in the South at $146 per cwt. This is essentially $1 per 
cwt lower than last-week levels. Bids are developing in the North at $236 to 
$240 per cwt, with major packers bidding $237 or less, with higher bids coming 
from regional packers. Asking prices on unsold cattle remain at $148 and higher 
in the South and $242 and higher in the North. Beef cut-outs at midday are 
higher, $1.06 per cwt higher (select) and up $1.65 per cwt (choice) with 
moderate movement of 107 total loads reported (53 loads of choice cuts, 24 
loads of select cuts, eight loads of trimmings, 21 loads of ground beef).


   Sharp losses have quickly developed through feeder cattle futures during 
morning trade. The lack of support in cash markets so far this week seems to be 
limiting the overall strength in summer feeder cattle contracts. Even though 
beef demand is expected to strengthen through the near future, there are 
growing concerns about the ability to hold cash values long term. 


   Mixed trade is seen through nearby lean hog futures following very little 
additional longer term direction through the morning. Summer contract have 
gained additional market support at midday from the narrow gains seen early in 
the session, but most traders appear to be squaring positions in front of the 
long holiday weekend. Cash prices are lower on the National Direct morning cash 
hog report. The weighted average price fell $2.04 per cwt to $112.90 per cwt 
with the range from $104.00 to $114.73 per cwt on 2,085 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 180 loads with 
prices falling $0.62 per cwt. Lean hog index for 4/14 is at $124.12 down 1.43, 
with a projected two-day index of $123.08 down 1.04. 

   Rick Kment can be reached at rick.kment@dtn.com 


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