DTN Livestock Midday: Limit Gains Develop in Hogs

Prices surged higher with nearby lean hog futures locked in limit gains at midday. The widespread support is testing short-term resistance levels, with additional potential buyer support likely Monday.

General Comments

Cash cattle activity is starting to trickle into the market with a few sales holding prices generally $2 per cwt lower than last week. This may spark additional support late in the day. Hog futures have surged higher with buyers moving prices back above short-term resistance levels Friday morning.

Corn markets are lower in light trade. December corn futures are 2 cents lower. Stock markets are mixed in light trade. The Dow Jones is 89 points higher while Nasdaq is down 30 points.

LIVE CATTLE:

Mixed trade is seen through the live cattle complex with very limited direction seen through the last half of the week. Traders continue to focus on lackluster developments in beef values and cash cattle markets at this point late in the week, but this is not breaking down most contract months. Nearby futures are holding light to moderate support, while pressure in summer 2019 contracts is limiting widespread support.

Cash cattle trade is starting to slowly develop in the North midmorning Friday with a few scattered sales seen at $178 dressed basis in Nebraska. This is about $2 per cwt lower than last week, but the limited trade seen so far, may not be enough to establish a trend for the week at this point. Bids are seen in other areas with bids from $109 to $112 live and $176 dressed. The lower end of this live range is seen in the South. Asking prices are at $116 to $117 live basis, and $180 dressed. More activity is expected to develop through the afternoon.

Boxed Beef cut-outs at midday are lower, $0.02 lower (select) and down $0.22 per cwt (choice) with light movement of 42 total loads reported (24 loads of choice cuts, 6 loads of select cuts, no loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:

Firm pressure is seen in a very lightly traded feeder cattle complex with front month January futures now holding a $1.07 per cwt loss. The expiration of November contracts Thursday is now putting more focus on the January contract which is trading in a much more consistent pattern with other nearby contracts than the previously sluggish November futures. Limited activity is expected to be seen through the end of the session with traders allowing late week pressure to move back into the complex.

LEAN HOGS:

Sharp gains have quickly flooded through lean hog futures trade Friday morning. February and April futures are currently locked in limit higher trade of $3 per cwt with spot month December contracts hovering just under that level with a $2.97 per cwt rally. If prices are able to hold these levels, expanded trader limits will be seen Monday. The focus on firming demand through the end of the year and early 2019 has once again gained the attention of late week traders.

Cash prices are unreported due to confidentiality on the National Direct morning cash hog report.

Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.

The National Pork Plant Report posted 230 loads selling on the morning report. Pork carcass values added $0.32 per cwt at $68.99 per cwt. Lean hog index for 11/14 is $59.86, down 0.61, with a projected two-day index of $59.10, down 0.76.

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