Harold House with the Kansas City Trade Group says the markets will probably remain quiet most of the week ahead of the release of the USDA’s Friday report. to Click below to hear more on the markets from KMZU’s Mandy Young and Harold House from the Kansas City Trade Group.
Look for the cattle complex at the CME to start the new week on a mixed basis, some lower in the live pit and moderately higher in the feeder trade. Similarly, lean hog contracts should begin with uneven price action with ideas torn between recent weakness in wholesale pork demand and the premium status of the cash index.
Cattle: Cash: Steady-$1 Lower Futures: Mixed Live Equiv. $136.11 – $0.72
The cash cattle trade will be typically all-show-and-no-go in the early rounds of buyers and seller limited efforts to the distribution of new show lists. The fed offering is likely to be about steady with last week. Our guess is that initial asking prices will be around $121-plus in the South and $196-plus in the North. Expect live and feeder futures to open on a mixed basis with the former moderately lower and latter moderately higher.
Hogs: Cash: Steady-$0.50 Lower Futures: Mixed Lean Equiv. $113.78 – $0.13
Hog buyers should start work this morning with bids steady to 50-cents lower. While they’re hoping to extend the cost savings of Friday, packers will no doubt remain mindful of relatively tight midsummer supplies. It will be interesting to see the pork carcass values continue to erode or find enough post-holiday retail buying interest to stabilize. Lean futures will probably open on both sides of unchanged with nearby contracts holding up better than deferreds.
The key to Monday’s trade in most commodities, including grains, could be how much more the U.S. dollar index rallies. Overnight strength in the markets was trimmed by early Monday morning due to the extended move in the greenback ahead of Wednesday’s release of the Fed’s minutes from it’s June meeting.
The Dow Jones Industrial Average closed 147.29 points higher Friday at 15,135.84. The overnight session saw the Dow Jones futures trade 74-points higher, indicating U.S. stocks could see continued buying interest Monday. The overnight crude oil market was $0.17 lower at $103.05 while Brent crude was $0.63 lower at $107.09. The August gold contract gained $15.90 to close at $1,228.60 while the U.S. dollar index is 1.109 higher at 84.340. Soybeans at the Dalian Exchange were lower while Malaysian palm oil contracts were also lower.