The ICE Dec and Mar contracts gave back 160 and 87 points on the week, respectively, as last week’s inversion between the two contracts gave way to partial carry. Well,
DTN Livestock Midday: Feeder Cattle Gains Hit Trading Limit
Aggressive buying has redeveloped Thursday and erased aggressive losses seen midweek. The focus on continued tight supplies and an expected lighter cattle placement in Friday’s report has drawn buyers back into the market.
Active buying has flooded back into the livestock markets Thursday morning with all nearby contracts in all markets holding gains between $2 and $3 per cwt. The bounce back from losses Wednesday is expected to draw additional support into the market through the end of the week. Corn futures are higher at midday. July corn futures are 6 cents per bushel higher. Stock markets are lower in light trade. The Dow Jones is 20 points lower while Nasdaq is down 9 points.
Live cattle futures are quickly responding to the swift and decisive way that the feeder cattle futures have reacted to sharp losses Wednesday. Although most had expected continued support into the market, the aggressiveness of the price surge continues to draw commercial and investment traders back into the complex. Nearby futures are holding gains over $2 per cwt, with August leading the surge as prices are flirting with the daily trading limit of $3 per cwt gains. It would not be surprising if nearby contracts are locked in limit-higher trade before the session closes. Additional focus on cattle-on-feed numbers ahead of Friday’s report is also adding strength to the market.
Cash cattle trade remains quiet through the morning, although some trade did take place in the North on Wednesday, and a few sales are reported midday Thursday in the South $1 to $2 per cwt higher than last week. The renewed support in futures markets has helped to solidify early asking prices and may delay trade activity until the end of the week. Asking prices remain at $150 and higher per cwt in the South and $240 and higher in the North. Beef cut-outs at midday are higher, $1.14 per cwt higher (select) and up $1.16 per cwt (choice) with light movement of 76 total loads reported (31 loads of choice cuts, 24 loads of select cuts, 11 load of trimmings, 9 loads of ground beef).
The bearishness of limit-down trade midweek was short lived as aggressive buyer support quickly returned to the market, pushing prices at or near the daily trading limit of $3 per higher once again. Traders are once again focusing on tight supply levels and also starting to adjust positions in front of the expected bullish cattle-on-feed report that will be released Friday afternoon. Very little direction change is expected to be seen before the end of the trading session Thursday, likely allowing $3 gains to hold.
Any doom-and-gloom feelings that were stirred Wednesday seem to have been temporarily healed as traders aggressively flooded back into the market with prices well over $2 per cwt higher in all nearby contracts. The shifting momentum continues to be the biggest driver in the overall complex with traders looking for additional fundamental market information but are content trying to keep up with the latest round of rollercoaster-type price shifts. Little additional trade activity is expected to be seen through the rest of the session with traders content with the recent market shift for the time being. Cash prices are lower on the National Direct morning cash hog report. The weighted average price lost $0.94 per cwt to $117.00 per cwt with the range from $112.00 to $120.00 per cwt on 3,487 head reported sold.
Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price lost $1.05 per cwt to $118.11 per cwt with the range from $112.00 to $120.00 per cwt on 642 head reported sold. The National Pork Plant Report is reported 139 loads selling as prices up $0.18 per cwt. Lean hog index for 6/17 is at $117.33 up 1.20, with a projected two-day index of $118.46 up 1.13.
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