Saturday, November 21, 2009

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Live Cattle			Feeder Cattle			Lean Hogs
LCZ9	86.225	+0.55	FCX9	95.125	+0.325	LHZ9	57.725	+1.025
LCG0	87.60	+0.75	FCF0	95.575	+0.50	LHG0	64.60	+1.00
LCJ0	89.35	+0.70	FCH0	96.475	+0.875	LHJ0	67.625	+0.825
			Index	93.07	-0.18	Index	53.84	-0.01

 

 

 

Live cattle closed higher on the day. Outside markets traded erratically all day, yet did not provide support until the end of the session. Futures closed on a buying note after being pressured lower in early morning trade. February and April led the way higher behind fund buying this is more likely to be involved in this months over the December contract. Cattle traded $87-88 last week and if trade is merely steady than the discount futures hold will be a reason to buy December futures. Cash trade is off to a firm start this week with light trade in Texas at $88. Asking prices are mostly $89-90 and this early week trade is likely a result of feeders wanting to move cattle at steady money since futures are now showing a discount to the cash market. With the higher cash prices last week some feedyards are finally approaching profitable levels. Hedge pressure should surface in April live cattle above $90. Yet, as margins improve for the feeder the higher cash values are decreasing packer margins. This will keep a lid on cash prices unless boxed beef starts to justify $88-90 live. Midday boxed beef was higher with Choice at 141.10 up .27 and Select at 135.54 up .16.

 

 

 

 

 

Feeders closed higher on the day. March led the gains thanks to ideas of few cattle and better demand in that time frame. Also, fund buying will likely go into Jan, March, and April. Futures were mostly mixed during the session, but closed strongly in line with gains seen in nearly all agricultural commodities. Early week feeder cattle auction saw cattle trade steady to $2 higher. This trend will need to continue to pull the CME index higher and close the discount it holds to November futures. Otherwise, the higher live cattle cash trade should be a supporting factor looking ahead. 

 

 

Direct hog markets were higher with the IA/So.MN direct market at $53.75 up 1.70; Western cornbelt $53.53 up 1.21; Eastern cornbelt $49.94 up .33; and the National average at $52.83 up .83

 

Pork cutout; loins -1.33, hams +2.11

 

Lean hogs closed higher on the day. Hogs continue their surge ahead after opening mixed. Hogs finished strongly along with cattle and grain contracts thanks to fund buying. Beyond that factor hogs were also helped by higher cash prices to start the week. The cutout continues to hold steady to higher keeping underlying support to hogs. Ham prices are now near $60, which is quite a ways from $40 that we saw several weeks ago. Slaughter figures are beginning to suggest that hogs have worked through the biggest glut of market ready hogs. A decreasing slaughter in the weeks ahead will be supportive. However, outside of today we have yet to see sharp gains in cash values.

 

 

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