Harold House with the Kansas City Trade Group suggests it will be a quiet day in the markets Friday.
Look for the cattle complex to start out cautiously lower as traders position ahead of cash news of the release of the June 1 on feed report. Lean futures should also open in red ink thanks to late-week profit taking and fears that the cash and product markets have simply turned too hot not to cool off.
Cattle: Cash: Steady-$2 Lower Futures: 10-30 Lower Live Equiv. $136.68 + $0.44
With Thursday’s cash cattle market limited to scattered sales reported in parts of Nebraska and Iowa (i.e., $194-195, mostly $194), the heart of the week’s business has once again been reserved for the eleventh hour. Opening bids are likely to start out around $117 in the South $192-194 in the North. Assuming asking prices of $122 in the South and $196 plus hold through the morning, significant trade volume could actually be delayed until after the unveiling of the new feedlot inventory. The June 1 on-feed report will be released this afternoon at 2:00 CST. Average trade guesses expect placement to be 96% of May 2012, and June 1 on feed to be 5% below last year’s bunk line. Live and feeder futures should open moderately lower, pressured by cash uncertainty and misgiving tht the beef carcass value will continue to erode over the next month or so.
Hogs: Cash: Steady-$0.50 Higher Futures: 10-30 Lower Lean Equiv. $114.23 – $0.25
The late-week cash hog trade will most likely open on a steady basis. While most packers have short-term slaughter plans covered , hog buyers sense that procurement will remain challenging well into midsummer. Lean futures seem geared to start out some lower, checked by pre-weekend profit taking and nervousness over the sustainability of bullish fundamentals.
November soybeans are lower early Friday with better planting conditions likely in Iowa, Illinois, and Missouri after this week’s drier warmer weather. Friday’s weather map shows rain in Minnesota and Wisconsin adding to planting delays. Wheat harvest is getting underway in Kansas with a dry forecast in the Southern Plains. More range-bound trading in grains is likely ahead of USDA’s Acreage and Grain stocks reports on the 28th of June.
The Dow Jones Industrial Average closed 353.87 points lower Thursday at 14,758.32 after the Federal Reserve cited diminished risks to the outlook for the economy and labor market. The overnight session saw the Dow Jones futures trade 92-points higher early on Friday, indicating higher prices for U.S. stocks later in the morning. The overnight crude oil market was $0.54 higher at $95.68 while Brent crude was $0.65 higher at $102.80. The August gold contract lost $9.70 to close at $1,295.90 while the U.S. dollar index was 0.12 lower at 81.97. Soybeans at the Dalian Exchange were slightly lower while Malaysian palm oil contracts were also lower.