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DTN Midday Livestock Comments 02/04 11:15
With Fundamental Support, Livestock Contracts Scale Higher
With fundamentals lending the futures complex all the support it could need,
the entire livestock is trading higher into Wednesday's noon hour.
Rick Kment
DTN Analyst
GENERAL COMMENTS:
It's been another prosperous morning for the livestock complex as all three
of the markets are trading fully higher into Wednesday's noon hour. Still no
cash cattle trade has developed, but it's assumed prices will be higher again
this week as the board's been incredibly supportive and market's fundamentals
point to higher prices as market-ready supplies of cattle are thin. March corn
is up 1 1/4 cents per bushel and March soybean meal is up $6.80. The Dow Jones
Industrial Average is up 311.56 points and NASDAQ is down 269.60 points.
LIVE CATTLE:
The live cattle complex continues to rally aggressively into Wednesday's
noon hour as the market is robustly supported by strong fundamentals. Aside
from last week's bullish Cattle Inventory report, and the rally seen in last
week's fed cash cattle market, the market knows market-ready supplies of cattle
are thin right now and fed cash cattle prices are likely to continue to scale
higher through at the least the first quarter of the year. The rekindled flame
of the market's strong fundamentals has helped drive a notable rally in the
futures complex too. February live cattle are up $0.47 at $240.82, April live
cattle are up $1.12 at $242.70 and June live cattle are up $1.35 at $237.97.
Still no cash cattle trade has developed and it's most likely business will be
delayed until Thursday or Friday. Both bids and asking prices remain elusive at
this point.
Boxed beef prices are lower: choice down $0.57 ($370.14) and select down
$0.52 ($366.71) with a movement of 58 loads (36.60 loads of choice, 3.81 loads
of select, 10.18 loads of trim and 7.11 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is again charging higher into the day's noon hour
as the market is feeling well supported by the industry's strong fundamentals
and is also comforted to see the live cattle contracts trading higher as well.
March feeders are up $2.57 at $370.50, April feeders are up $2.20 at $368.07
and May feeders are up $1.77 at $364.00. So long as the live cattle contracts
continue to scale higher through the afternoon, it's likely feeder cattle
contracts will do so as well.
LEAN HOGS:
It's a full-fledged break-out day for the lean hog complex as the spot April
contract scales to new contract highs as demand has been plentiful and the
market isn't fearful of grinding higher. April lean hogs are up $1.45 at
$99.60, June lean hogs are up $0.95 at $111.82 and July lean hogs are up $0.67
at $112.50. Even though midday pork cutout values are a tick lower, the market
seems to be finding comfort in demand which has been strong in recent trading
days.
The projected CME Lean Hog Index is delayed from the source. Hog prices are
higher on the Daily Direct Morning Hog Report, up $0.02 with a weighted average
price of $86.29, ranging from $82.00 to $88.00 on 2,480 head and a five-day
rolling average of $85.49. Pork cutouts total 179.51 loads with 159.35 loads of
pork cuts and 20.16 loads of trim. Pork cutout values: down $3.84, $93.53.
ShayLe Stewart can be reached at shayle.stewart@dtn.com
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