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DTN Midday Livestock Comments 09/09 12:07
Lean Hogs Move Sharply Higher
Strong upward movement is seen in the lean hog market with new contract
highs developing in 2011 contracts. Cattle futures were sluggish in early trade
and are slipping following the sharp gains Wednesday.
By Rick Kment
DTN Livestock Analyst
GENERAL COMMENTS:
Strong upward movement was seen in the lean hog market Thursday morning
following increased fundamental support. These gains were not carried over to
the cattle market, which is showing moderate losses in a sluggish market. Corn
futures are higher with moderate support. December corn futures are 3 1/4 cent
higher at midday. Stock markets are higher. The Dow Jones is 56 points higher
while Nasdaq is up 16 points.
LIVE CATTLE:
Live cattle futures are steady to 30 cents lower in slow trade Thursday
morning. Additional support in the market could develop through the end of the
session, but at this point traders are content in the narrow range as they take
profits from the move Wednesday. The lack of anticipated cash business has
taken out most of the uncertainty late in the week. Cash trade seems to be
pretty much wrapped up following the active trade Wednesday. With sales prices
at $97 to $98 in the South and $153 to $154 in the North, overall movement is
steady to $1 higher for the week. Beef cut-outs at midday are lower, falling 93
cents per cwt (select) and 61 cents per cwt (choice) with heavy movement of 301
total loads reported (126 loads of choice cuts, 82 loads of select cuts, 24
loads of trimmings, 69 loads of coarse grinds).
FEEDER CATTLE:
The lackluster activity in the live cattle market and morning gains in the
corn market have pretty much taken the wind out of the feeder cattle sales.
Overall prices are trading in an extremely narrow range with September and
October contracts priced within 2 1/2 cents of each other. This makes rolling
to the October contracts simple but at the same time less appealing to quickly
step into the market.
LEAN HOGS:
Strong support has actively stepped into the market at midday. With the
midday cash hog prices drawing significantly more interest into the market,
nearby contracts are posting gains of $1.30 to $1.35 per cwt in moderate to
active trade as the sharply higher cash price seemed to shake traders' hands
loose. Continued expectations of renewed cash market support and follow-through
gains in the wholesale pork market could add additional fuel to the fire. Cash
prices are higher at midday on a heavy run of 3,821 head. Prices gained $3.80
per cwt with a weighted average of $84.15. The trading range is $78.38 to
$84.99 per cwt. Fresh pork trade reported 18 loads of fresh pork product sold
on the midday carlot. Lean hog index for 9/7 is at $81.53 up 9 with a projected
2 day index of $81.86 per cwt, up 33.
PORK BELLIES:
The 14-to-16-pound bellies reported two loads selling at $154 per cwt on the
midday carlot report.
Rick Kment can be reached at rick.kment@telventdtn.com
(SK)
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