Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LIVE CATTLE COMPLEX
Very bullish market action yesterday following the friendly Cattle on Feed report on Friday afternoon as prices gapped higher and did not back off much through the session, closing toward the upper end of the day’s range. The steady buying and inability to pull back intraday, is a strong indication for a potential further advance and last week’s downside correction looks to have run its course. Cutout jumped sharply at midsession. The deferred months were stronger than the nearby’s in both live cattle and feeders. High beef prices are being blamed for the bankruptcy filing of 1 of Wendy’s largest franchisees, owning 314 locations in 15 states.
LEAN HOG COMPLEX
The hog market started the week strong after Friday’s new contract low close in December and finally made a higher daily high for the 1st time in 7 sessions. Open interest was little changed overall but did rise nearly 1900 contracts in December. Cutout bounced and cash hogs were down $1.41 nationally. The heavy managed money short position encouraged some short covering yesterday but unless prices can follow through with a strong performance today, there is little reason to believe the downtrend is over. CME Lean Hog Index as of September 17 was 84.02, down -1.00 for the day and down -3.92 versus a week ago. This is the lowest since January 27.
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