DTN Midday Livestock Comments 02/21 12:02
Hog Futures Rally on Trade Hopes
Buying quickly moved back into the lean hog complex with nearby futures $2
to $2.70 per cwt higher through the morning. This is helping to spark movement
back into the bearish complex.
By Rick Kment
Strong morning buying has flooded into hog trade as traders look at the
report of potential ag exports to China once a trade deal is done. But there is
no specific information available, allowing traders to speculate on future
demand. This is posing $2 per cwt gains in all nearby contracts midday
Thursday. Firm pressure is moving into cattle trade as traders square positions
from early week gains. Corn futures are higher in sluggish trade. March corn
futures are 6 cents higher. Stock markets are lower in light trade. Dow Jones
is 71 points lower with Nasdaq down 11 points.
Live cattle trade is slowly slipping lower as traders moved back into the
hog complex, allowing for some nearby contract liquidation by noncommercial
traders through the morning. This is holding spring and summer trade 30 to 80
cents lower although trade remains very limited. Cash markets have started to
see increased packer involvement through the morning, although bids have done
very little to improve as the week continues. Live bids are seen at $123 per
cwt, while dressed bids of $198 per cwt. Asking prices are at $128 and higher
live and $205 to $207 dressed. Active trade may still be pushed off until
Friday with both sides not budging at this point. Boxed Beef cut-outs at midday
are higher, $0.12 higher (select) and up $1.58 per cwt (choice) with light
movement of 61 total loads reported (31 loads of choice cuts, 13 loads of
select cuts, no loads of trimmings, 17 loads of ground beef).
Firm pressure has moved through all cattle trade Thursday morning with
increased market uncertainty developing through the entire complex. Following
early week support, traders are slowly but steadily backing away from previous
market support. This may add to even more pressure late in the week. Nearby
contracts are holding losses of $1 per cwt at midday, while limited softness
seen in deferred contracts.
Buyer support is moving into the complex Thursday morning as reports that
China will agree to purchase $30 million in ag products yearly. Although there
is no indication as to what products will be involved and how much of each of
these products, hog traders expect that pork will be a beneficiary of this
deal. This has pushed nearby contracts $2 to $2.67 per cwt higher at midday.
The previous pressure in the market has left the market ripe for a market
rally, which could lead to additional support even if trade deals are not
revealed. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $1.34 at $46.56 per cwt with the range from
$44.00 to $47.85 on 4,910 head reported sold. Cash prices unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork
carcass values shifted higher following mixed primal values, with prices
gaining $0.13 per cwt at $60.30 per cwt with 180 loads traded. Lean hog index
for 2/19 is $54.13, down $0.30, with a projected two-day index is $54.06, down
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up