DTN Midday Livestock Comments 05/24 12:09
Hog Prices Tumble Late Friday
Lean hog futures are posting sharp triple-digit losses late Friday based on
increased market pressure developing ahead of Memorial Day weekend. Early
support in cattle futures has eroded with traders selling ahead of the cattle
on feed report.
By Rick Kment
Strong pressure has continued to develop in hog trade with triple-digit
losses quickly developing late Friday. This may add increased long-term
pressure ahead of the long holiday weekend. Corn futures are higher in moderate
trade. July corn futures are 11 cents higher. Stock markets are higher in light
trade. Dow Jones is 109 points higher with NASDAQ up 33 points.
Live cattle futures are steady to moderately lower with increased pressure
developing in all but front-month June futures. Growing concern of expected
growth in cattle on feed numbers is causing traders to take protection in front
of the report and long holiday weekend. With markets closed Monday, traders
will have to wait until Tuesday before reacting to the report, which may add
increased volatility through the entire complex. Cash cattle trade remained
quiet with no additional bids seen Friday. Cash trade is expected to be done
for the week in all areas, with prices steady to $2 per cwt lower than last
week. Boxed Beef cut-outs at midday are higher, $1.95 higher (select) and up
$0.71 per cwt (choice) with light movement of 64 total loads reported (28 loads
of choice cuts, 13 loads of select cuts, 12 loads of trimmings, 11 loads of
Feeder cattle futures have moved firmly lower in late day trade with prices
22 to 90 cents per cwt lower as traders prepare for the upcoming cattle on feed
report. Expectations that sharp increases in cattle placements will be seen in
the afternoon cattle on feed report has eroded any previous support and added a
weaker market trend.
Active pressure has quickly moved into lean hog futures trade through the
last couple hours of trade Friday. The concern that markets will remain closed
over the next three days is sparking increased uncertainty through the entire
lean hog complex surrounding the relationship between the U.S. and China. Even
though volume in the complex remains extremely light late Friday, the focus on
market protection is pushing prices $2 to $2.50 per cwt lower at the end of the
week. Cash prices are lower on the National Direct morning cash hog report. The
weighted average price is down $2.52 at $77.96 per cwt with the range from
$72.00 to $78.53 on 5,095 head reported sold. Cash prices unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork
values continued higher following strong gains in rib primal cuts. Pork cutouts
added $0.90 per cwt at $83.52 per cwt with 167 loads traded. Lean hog index for
5/22 is $84.36, down 0.03, with a projected two-day index at $84.02, down 0.34.
Rick Kment can be reached at firstname.lastname@example.org
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