Livestock Analysis -- Advice (VIP) -- September 4, 2013

September 4, 2013 09:49 AM
 

Hogs

Advice: Cover 25% of 4th-qtr. protein needs are in long Dec. meal futures and 25% of 1st-qtr. needs in long March meal futures. Our fills were $422.20 in Dec. meal and $410.80 in March meal.

Price action: October and December lean hog futures gapped higher and finished the day near the daily highs with October up $1.12 1/2 and December 87 1/2 cents higher. Bull-spreading saw February through May futures closing moderately higher with far deferred months mixed.

Fundamental analysis: Rising wholesale pork prices and a decline in average marketing weights combined to send nearby contracts higher at the open, triggering buy stops above the August high of $88.30 for the October contract. The pork cutout value, which rose Tuesday afternoon, posted another increase in morning trading in a counter-seasonal trend. Movement has been stronger this week, as well, adding to the surge in nearby futures.

Technical analysis: The gap-higher trade today lifted October lean hogs to a new contract high. Today's gap from $88.45 to $88.05 is support. The $90.00 area provides resistance on the weekly chart.

Hedgers: 50% of expected 4th-qtr. production is hedged in Dec. lean hog futures at an average price of $82.12 1/2.

Feed needs: NEW ADVICE Cover 25% of 4th-qtr. protein needs are in long Dec. meal futures and 25% of 1st-qtr. needs in long March meal futures. Our fills were $422.20 in Dec. meal and $410.80 in March meal.

 

 

Live cattle

Advice: Cover 25% of 4th-qtr. protein needs in long Dec. meal futures and 25% of 1st-qtr. needs in long March meal futures. Our fills were $422.20 in Dec. meal and $410.80 in March meal.

Price action: Live cattle futures faced pressure for much of the session, but the market did settle high-range with losses of 7 1/2 to 20 cents.

Fundamental analysis: Traders worked to narrow the premium the front-month holds to last week's steady cash action at $123. Early cash market clues signal feedlots may have a slight advantage, as showlist estimates are down and beef movement has improved to start the week. This morning Choice and Select boxed beef cuts firmed 38 and 29 cents, respectively, on strong movement of 152 loads.

But late-week trade is likely as packers have yet to place bids and they have been quite reluctant to raise bids in recent weeks due to concerns about resistance to high beef prices from retailers and consumers.

Technical analysis: December live cattle saw a downside day of trade, but the contract settled high-range and well within its uptrend since May. Uptrending support intersects around $128.50. Resistance remains at the August high of $130.80.

 

Feeder cattle

Price action: Feeder cattle futures saw two-sided trade today and the market ended narrowly mixed for the day, with the front month slightly lower and deferreds steady to 37 1/2 cents higher. This was a high-range close for most contracts.

Fundamental analysis: Weakness in the corn market as well as a lower U.S. dollar index and improved risk appetite as illustrated by gains in the stock market lifted the feeder cattle market at times today. But spillover pressure from the live cattle market was a drag on feeders at times today. Also, the front-month holds around a $1 premium to the cash index.

Technical analysis: October feeder cattle futures dipped into the gap left by Friday's upside surge, but the contract bounced off the $158.50 area, marking this as near-term support. Resistance stands at the August high of $160.70.

Hedgers: Fed cattle producers should carry all risk in the cash market for now. Feeder cattle sellers and buyers should also carry all risk in the cash market for now, but feeder cattle buyers should stay in touch to establish long coverage.

Feed needs: NEW ADVICE Cover 25% of 4th-qtr. protein needs in long Dec. meal futures and 25% of 1st-qtr. needs in long March meal futures. Our fills were $422.20 in Dec. meal and $410.80 in March meal.

 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close