DTN Midday Livestock Comments 03/04 12:23
Meat Futures Roar Back at Midday
Quickly shaking off Tuesday's price collapse, cattle futures are exploding
higher at midday, reenergized by spec buying and the reality of cash premiums.
Lean hog contracts have also moved back in the pink, supported by short
covering and spillover buying from the cattle complex.
By John Harrington
Some showlists have been priced in the neighborhood of $162 in the South and
$255-260 in the North. Few expect to see much business before Thursday or
Friday. According to the midday report, the national hog base is $1.70 compared
with the prior day's closing weighted averaged ($55.00-65.00, $62.94). The corn
trade near the noon hour is 1-4 cents lower with nearbys holding up better than
deferreds. U.S. stocks are trading lower at midday as investors weighed a
series of economic data ahead of Friday's employment report that could shed
light on the timing of an interest rate hike. The Dow is 87 points lower with
the Nasdaq off 10.
Mostly 130 to 300 higher. After briefly trading lower in the initial rounds
of business, live contracts took off like a big bird. If we can close near
session highs, bulls will have succeeded in completely erasing Tuesday
pullback, once again underscoring the significance of the rally started late
last week. The premium of recent feedlot sales and seasonal bullishness ahead
appear to be driving forces. Beef cut-outs are mixed at midday, up $1.92
(select, $247.20) to off 0.45 (choice, $249.16) with light box movement (47
loads of choice cuts, 16 loads of select cuts, seven loads of trimmings, 16
loads of ground beef).
Up 250 to 422. As in the case of live cattle, feeder futures seem to be on
the verge of landing major bullish reversal. The midweek surge seems tied to
aggressive short covering and renewed commercial buying interest.
Mostly 100 to 260 higher. Lean issues are sharply higher near the top of the
noon hour, sparked by short covering, expectations of seasonal strength, and
spillover bullishness from the cattle complex. Carcass value is quoted more
than a buck higher at midday, particularly supported by better demand for ribs,
hams, and bellies. Pork cut-out: $68.90, off .77. CME cash lean 03/02: 66.67,
up 1.08 (DTN Projected lean index for 03/03: 67.73, up 1.06).
John Harrington can be reached at email@example.com
Follow John Harrington on Twitter @feelofthemarket
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