DTN Midday Livestock Comments
Cattle Paper Rallies Early, but Reverses Lower Near Midday
The cash cattle trade remains grounded at midday with just a small handful of bids on the table (i.e., $186 dressed, $115-116 live). The FCE was very limited with only 54 Kansas steers reported sold (i.e., $116). Asking prices are around $190 in the North and $120 in the South. Significant trade volume could be delayed until Thursday or Friday. According to the midday report, the national hog base is $1.89 lower compared with the Prior Day settlement ($73.00-79.50, weighted average $77.97). Off from early session highs, corn futures are roughly 2 cents higher in late morning business, tentatively supported by short covering and profit taking. The stock market is mixed heading toward the noon hour, up 29 points basis the Dow with the Nasdaq off 29.
LIVE CATTLE:
Live cattle opened with modest gains, but it didn't take long for selling interest to reconfigure. The trade is currently 62 to 87 points lower, pressured by long liquidation and uncertain cash prospects. Bears are once again back pounding on long-term support near 112 basis spot August.
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Beef cut-outs are mixed at midday, up $0.31 (choice, $205.72) to off $0.42 (select, $197.87) with light to moderate box movement (49 loads of choice cuts, 21 loads of select cuts, 5 loads of trimmings, 14 loads of coarse grinds).
FEEDER CATTLE:
Triple-digit losses dominate the feeder market near midday. The combo of the premium status of the cash index and defensive psychology in the corn market seemed to be supportive in the early rounds. But that didn't seem to last long with traders now taking back pretty much all of Tuesday's late progress.
LEAN HOGS:
Lean issues are mixed moving toward the top of the hour, up 117 to off 35. Spot August is catching most of the buying interest, no doubt encouraged by the premium status of the cash index. Carcass value is sharply higher at midday thanks to decent strength in all primals except the loin and butt. Pork cut-out: $100.32, up $1.50. CME cash lean index for 07/31: 87.70, off .40 (DTN Projected lean index for 08/01: 87.35, off .35).
John A. Harrington can be reached at john.harrington@dtn.com
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