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DTN Midday Livestock Comments          02/20 11:50

   Sharp Losses Return to Hog Trade

   April hog futures are posting sharp triple-digit losses for the second 
straight trading session. This underlying weakness continues to add concerns of 
long-term pressure continuing in hog trade.

By Rick Kment
DTN Analyst

General Comments

   Bearishness in hog trade has continued to develop Wednesday morning with 
triple-digit losses once again flooding into front-month April futures. This is 
pushing prices below $54 per cwt, adding market liquidation to the entire 
market. Cattle trade is hovering in a narrowly mixed range with limited 
fundamental support allowing traders to adjust positions following early-week 
gains. Corn futures are slightly higher in sluggish trade. March corn futures 
are 3/4 cent higher. Stock markets are lower in light trade. Dow Jones is 24 
points lower with Nasdaq down 14 points. 

   LIVE CATTLE:

   Live cattle futures are stuck in a narrowly mixed trading range with trades 
still focusing on pressure in hog futures while limited outside market activity 
is seen. Nearby contracts are holding narrow gains with April futures expanding 
the early-week support with a 35 cent price boost, while deferred futures are 
holding single-digit losses in very quiet activity. Cash markets remain quiet 
although a few bids have started to develop. Live bids are seen at $123 per 
cwt, while dressed bids of $198 per cwt. Asking prices are becoming more 
evident at $128 live and $205 and higher dressed. Boxed Beef cut-outs at midday 
are lower, $1.53 lower (select) and down $0.03 per cwt (choice) with moderate 
movement of 92 total loads reported (50 loads of choice cuts, 14 loads of 
select cuts, 20 loads of trimmings, 8 loads of ground beef).

   FEEDER CATTLE:

   Sluggish market activity is seen in feeder cattle trade which is symbolic of 
the overall lack of moves in all cattle markets. Losses have been contained to 
5 to 30 cents per cwt as traders square positions following strong early week 
gains. Limited late-day activity is expected to be seen through the all feeder 
cattle futures. 

   LEAN HOGS: 

   Despite the limited early trade, futures have once again swiftly moved lower 
with triple-digit losses in April and May contracts. Continued technical losses 
in front-month futures has pushed April contracts $2.70 per cwt. With prices 
falling below $54 per cwt. Follow-through pressure is likely to continue to be 
seen with lean hog markets able to expand normal trading limits, meaning trade 
will not stop until prices fall $4.50 per cwt lower. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$0.17 at $48.01 per cwt with the range from $44.50 to $48.52 on 6,680 head 
reported sold. Cash prices lower on the Iowa/Minnesota Direct morning cash hog 
report. The weighted average price is down $0.49 at $47.65 per cwt with the 
range from $44.50 to $48.25 on 2,730 head reported sold. Pork carcass values 
firmed midweek based on renewed buyer support moving into most primal cuts with 
prices gaining $1.15 per cwt at $61.06 per cwt with 206 loads traded. Lean hog 
index for 2/18 is $54.43, down $0.31, with a projected two-day index is $54.13, 
down $0.30.

   Rick Kment can be reached at rick.kment@dtn.com 


(CZ)

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