Tuesday, September 18, 2018  
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DTN Midday Livestock Comments          09/18 11:47

   Hog Futures Surge Higher

   Aggressive market support has quickly developed in front-month lean hog 
futures, drawing attention away from cattle markets Tuesday morning.

By Rick Kment
DTN Analyst


   Trade in livestock futures is dominated by aggressive market support that 
has pushed nearby lean hog futures to new short-term highs. October futures are 
flirting with limit gains at midday. Cattle futures, on the other hand, remain 
sluggish with limited activity developing in all contracts. Corn markets are 
lower in light trade with September corn futures 5 cents lower. Stocks are 
higher in light trade. The Dow Jones is 154 points higher while Nasdaq is up 75 


   Live cattle futures have trickled lower through the morning with prices 10 
to 25 cents per hundredweight (cwt) lower. The overall lack of pressure in the 
market seems to be focusing on the firm undertone seen late last week. The 
aggressive gains in hog markets have also likely limited any buyer support in 
cattle markets, as some traders are focusing all of their attention on the hog 
complex. Cash cattle markets are undeveloped with no bids or asking prices 
readily available at this point. It may be the last half of the week again 
until significant market development are seen. Boxed beef cut-outs at midday 
are mixed, $0.23 higher (select) to down $0.07 per cwt (choice) with light 
movement of 67 total loads reported (39 loads of choice cuts, 17 loads of 
select cuts, no loads of trimmings, 11 loads of ground beef).


   Narrow losses have slowly developed through the morning Tuesday. Traders are 
looking for additional market direction, but given choppy trade activity 
through the week, traders seem to be unable to bring any significant movement 
to the table. This is keeping prices steady to 15 cent per cwt lower in most 
contracts as the potential for late-day market shifts still develops due to the 
limited overall volume.       


   Strong gains have flooded into nearby lean hog futures trade Tuesday with 
front-month October futures flirting with limit gains as prices are $2.90 per 
cwt higher at midday. Triple-digit gains are seen in all nearby trade with 
December and February futures trading between $1.40 and $2.50 per cwt higher. 
Increased support has also developed in deferred futures based on the momentum 
shift in spot contracts, but traders remain less aggressive, with prices moving 
just 40 to 90 cents per cwt higher during morning activity. This may add even 
more uncertainty through the rest of the week. Cash prices are higher on the 
National Direct morning cash hog report. The weighted average price is $0.89 
higher at $51.55 per cwt with the range from $44.00 to $55.00 on 6,312 head 
reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash 
hog report. The weighted average price is $0.60 higher at $52.43 per cwt with 
the range from $44.00 to $55.00 on 3,791 head reported sold. The National Pork 
Plant Report posted 200 loads selling on the morning report. Pork carcass 
values added $0.27 per cwt at $76.29 per cwt. Lean hog index for 9/14 is at 
$53.48 up 1.63 with a projected two-day index of 54.58, up 1.10.

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


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