Livestock Commentary 2018-08-29T18:10:49+00:00

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Live Cattle Futures Bumping Up Against Resistance Levels

By Dennis Smith | Grain PhD Ag Risk Specialist

LEAN HOGS:

Cash is called steady. Packers, obviously, are trying to slow down the advance in cash hog prices in an effort to recoup lost margin. My sources indicate that three plants will be dark on Friday, restricting the kill by just over 50,000 pigs. The weekly projection is coming in at 2.480 million pigs, shy of last week’s harvest of 2.504. If China is in the market as we suspect, cutout values should continue to crank higher. The weekly appreciation in the hog carcass, since the week ending March 9th, has been $3.12, $3.85, $8.90, and up $3.54 last week. Yesterday’s cutout was up .82. Also yesterday open interest fell out of the April and June hogs with total OI down 2,900. A SEASONAL LOW IS DUE NOW. Perhaps it was established yesterday. This is one of those days in which you expect, you hope that the trend simply reasserts itself. So I have few expectations and I’m fully willing to let the market do the talking. There’s no fresh news on Trumps threat to close the Mexican border and no fresh news regarding the China/U.S. trade negotiations. Again, simply let the market figure it out.

LIVE CATTLE:

Nice rally in LC and FC futures yesterday occurred on volume of 62,000 with open interest in LC down 800. While all contracts pulled back off their session highs, after penetrating resistance levels, all contracts still closed higher. Show list numbers are up in the south (up 5,000 head) but they’re down in the north (down 14,000) as calf-fed animals have been set back and they’re as much as thirty days late. If seasonal demand kicks in before these cattle are ready, cash steer prices may surprise most. The industry has been convinced and brow beaten by the packer into becoming bearish just ahead of the best demand timeframe of the entire year. The negotiated trade last week was 85,783, down about 2% from the prior week. Draw a line in the sand at yesterday’s session highs. A close above these levels is bullish.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

April 2nd, 2019|
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Live Cattle Futures Bumping Up Against Resistance Levels

By Dennis Smith | Grain PhD Ag Risk Specialist

LEAN HOGS:

Cash is called steady. Packers, obviously, are trying to slow down the advance in cash hog prices in an effort to recoup lost margin. My sources indicate that three plants will be dark on Friday, restricting the kill by just over 50,000 pigs. The weekly projection is coming in at 2.480 million pigs, shy of last week’s harvest of 2.504. If China is in the market as we suspect, cutout values should continue to crank higher. The weekly appreciation in the hog carcass, since the week ending March 9th, has been $3.12, $3.85, $8.90, and up $3.54 last week. Yesterday’s cutout was up .82. Also yesterday open interest fell out of the April and June hogs with total OI down 2,900. A SEASONAL LOW IS DUE NOW. Perhaps it was established yesterday. This is one of those days in which you expect, you hope that the trend simply reasserts itself. So I have few expectations and I’m fully willing to let the market do the talking. There’s no fresh news on Trumps threat to close the Mexican border and no fresh news regarding the China/U.S. trade negotiations. Again, simply let the market figure it out.

LIVE CATTLE:

Nice rally in LC and FC futures yesterday occurred on volume of 62,000 with open interest in LC down 800. While all contracts pulled back off their session highs, after penetrating resistance levels, all contracts still closed higher. Show list numbers are up in the south (up 5,000 head) but they’re down in the north (down 14,000) as calf-fed animals have been set back and they’re as much as thirty days late. If seasonal demand kicks in before these cattle are ready, cash steer prices may surprise most. The industry has been convinced and brow beaten by the packer into becoming bearish just ahead of the best demand timeframe of the entire year. The negotiated trade last week was 85,783, down about 2% from the prior week. Draw a line in the sand at yesterday’s session highs. A close above these levels is bullish.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

April 2nd, 2019|
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