DTN Midday Livestock Comments

GENERAL COMMENTS:

Cattle futures have turned sharply lower in aggressive morning trade following the swift turn higher in grain markets Tuesday morning. This aggressive triple-digit pressure in feeder cattle and live cattle markets is causing a bearish tone through the entire complex. Lean hog futures remain mixed in sluggish trade at midday, but nearby contracts have eroded based on cattle market weakness. Corn prices are higher in light trade. September corn futures are 4 cents higher. Stock markets are mixed in light trade. The Dow Jones is 93 points lower while Nasdaq is up 8 points.

LIVE CATTLE:

Live cattle futures have moved lower Tuesday morning with triple digit gains quickly trying to keep pace with the eroding losses seen in the feeder cattle market. Live cattle futures have posted $1.60 to $1.70 per cwt losses at midday which continues follow increased pressure in the entire cattle market. There is increased weakness through the entire complex and is likely to keep markets under pressure over the near future. Cash cattle markets remain at a standstill with bids and asking prices still quiet late Tuesday morning. There is very little direction expected to be seen through the rest of the morning, and with the pressure in futures trade, it may be midweek before any interest is shown by packers or feeders. It is likely going to be the last half of the week before active trade develops. Beef cut-outs at midday are mixed, $0.08 higher (select) and down $0.76 per cwt (choice) with active movement of 101 total loads reported (47 loads of choice cuts, 34 loads of select cuts, 9 load of trimmings, 12 loads of ground beef).

Feeder Cattle:

Sharp triple-digit losses have flooded into feeder cattle markets following aggressive gains in grain trade during the early morning activity. This pressure in the cattle complex quickly offset previous market support and caused many traders to rethink trade buyer interest that had moved into the complex. Nearby futures are holding losses of $3 per cwt although contracts are well off of session lows as trade volume has slowed through the second half of the session.

LEAN HOGS:

Early mixed trade in lean hog futures has been offset by building pressure at midday as the softness in the cattle market has eroded nearby lean hog trade. August lean hog contracts are holding a 65 cent per cwt loss at midday with the concern that additional fundamental pressure may lead to additional market weakness in the near future. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.48 at $85.31 per cwt with the range from $81.00 to $86.50 on 5,257 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.20 at $86.21 per cwt with the range from $85.00 to $86.50 on 1,951 head reported sold. The National Pork Plant Report reported 183 loads selling with prices adding $0.79 per cwt. Lean hog index for 7/14 is at $92.50 down $0.28 with a projected two-day index of $92.46, down $0.04.

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

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