DTN Midday Livestock Comments

GENERAL COMMENTS:

Firm pressure has continued to hold in cattle futures, although feeder cattle markets have pulled back from session lows at midday. The overall lack of support in the complex continues to limit not only trade activity through the market, but also the ability to bring long term support to the entire market. Hog futures are mixed at midday, although the general tone of the market remains weak given the pressure in cash values and softness in cattle trade. Corn prices are higher in light trade. July corn futures are 7 cents higher. Stock markets are higher in light trade. The Dow Jones is 22 points higher while Nasdaq is up 23 points.

LIVE CATTLE:

Live cattle futures has lost market support through the end of the morning with August futures holding 95 cent losses at midday. This lack of support through the entire cattle complex is creating additional longer term concerns in not only the nearby live cattle market, but also the feeder cattle futures. August live cattle futures are holding $1.07 per cwt losses, with the rest of nearby contracts hovering in a narrow trading range, stuck from 60 to 70 cents per cwt lower. The overall lack of support across the market Monday morning could bring about longer term pressure as traders remain concerned about beef market support through the end of July. Cash cattle interest is quiet with activity limited to inventory taking and show list distribution. Asking prices and bids are undeveloped at this point and not likely to be seen until Tuesday or later. Beef cut-outs at midday are mixed, $0.57 higher (select) and down $1.13 per cwt (choice) with light movement of 82 total loads reported (49 loads of choice cuts, 20 loads of select cuts, 5 load of trimmings, 9 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures remain under light to moderate pressure midday Monday following strong early selling activity. The pullback from triple digit losses earlier in the morning has allowed for some buyer support to move back into the market. But this is unable to stabilize the market and is keeping the entire cattle complex under pressure. The focus on additional pressure in both fundamentals and technical factors over the next couple of weeks could spark additional liquidation in nearby and deferred contracts.

LEAN HOGS:

Mixed trade continues to be seen through lean hog futures at midday, although the pressure in cattle markets and softness in cash hog and pork values is eroding overall buyer support during late morning. July futures are able to hold a 5 cent gain, although other nearby contracts are holding 20 to 70 cent losses with traders focusing on additional follow through pressure that may step back into the market through the rest of the session. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.17 at $86.14 per cwt with the range from $82.00 to $88.00 on 5,477 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $0.25 at $87.68 per cwt with the range from $82.00 to $88.00 on 1,848 head reported sold. The National Pork Plant Report reported 103 loads selling with prices falling $0.84 per cwt. Lean hog index for 7/7 is at $92.46 up $0.06 with a projected two-day index of $92.46, unchanged.

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

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