DTN Closing Livestock Comment 06/14 16:28
Late-Week Liquidation Continues in Livestock Markets
Livestock futures fell Friday as traders liquidated positions at the end of
By Rick Kment
GENERAL COMMENTS: The entire livestock complex was under pressure Friday as
traders liquidated positions at the end of the week. Hog futures fell by triple
digits on uncertainty about demand through the rest of the year. From Friday to
Friday, livestock futures scored the following changes: Jun LC up $1.85; Aug LC
up $0.98; Aug FC off $1.72; Sep FC off $1.55; Jun LH up $0.72 and Jul LH off
$2.00. Cash cattle trade remained scattered midafternoon Friday with just a few
cattle selling in the North at $184 dressed. Additional trade is expected in
the North with bids of $112 to $114 live and $182 to $185 dressed developing.
Asking prices remain at $114 and higher live and $187 and higher dressed.
Although trade in the South has been light this week, bids had not developed in
these areas Friday, leaving the impression that business is finished for the
week. The National Daily Direct afternoon hog report was $0.04 lower ($67-$78
per cwt, weighted average $75.79) on 12,085 head sold. Corn futures firmed in
active trade Friday with July up 11 cents per bushel. The Dow Jones Index was
17 points lower with the NASDAQ down 40 points.
LIVE CATTLE: Live cattle futures fell $0.27 to $0.80 on fundamental
weakness. Moderate pressure in live cattle trade Friday afternoon followed
pressure in feeder cattle and concerns about increased liquidation in the
coming weeks. Prices will likely move in a moderate range through the rest of
spring and summer. Potentially growing demand for beef is being clouded by
uncertainty about feed prices. Beef cut-outs: mixed, down $1.95 (select,
$202.76) to up $0.13 (choice, $222.23) with moderate demand and offerings, 147
loads (59 loads of choice cuts, 32 loads of select cuts, 9 loads of trimmings,
10 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. Cash cattle trade is not expected to wrap
up until late Friday, but Monday's activity is not expected to be affected.
Showlist distribution and inventory-taking will be the main focus Monday with
trade likely developing later in the week.
FEEDER CATTLE: Feeder cattle futures closed $0.70 to $1.17 lower. Strong
gains in corn futures Friday put additional pressure on all cattle markets.
Feeder cattle are affected the most by higher production costs, as this
directly affects prices paid for cattle. The continued growing supply of cattle
through the end of the year is likely to limit upside potential for beef
values, putting additional financial pressure on the feeder cattle market in
the coming months. CME cash feeder index for 6/13 is $134.25, up $0.89.
LEAN HOGS: Lean hog futures closed $2.20 lower to $0.15 higher. The market
quickly came under pressure Friday as traders focused on the inability to
consistently shift cash prices higher and variability in pork values.
Uncertainty over trade with China is also eroding market support, even though
domestic demand is likely to remain strong. Nearby futures held losses of $2
per cwt or greater at closing bell as traders broke through short-term support,
sparking late-day liquidation. Pork prices trickled higher following mixed
shifts in primal cuts. Pork cutout values rose $0.20 per cwt, moving to $83.21
per cwt, on 242 loads. CME cash lean index for 6/12 is $79.57, up $0.03. DTN
Projected lean index for 6/13 is $79.46, down $0.11.
MONDAY'S CASH HOG CALL: Steady to $1 lower. Limited direction is expected
next week with packers still filling aggressive procurement schedules. Most
bids are expected to be steady to weak Monday. Monday slaughter numbers are
expected at 476,000 head.
Rick Kment can be reached at email@example.com
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