DTN Midday Livestock Comments

GENERAL COMMENTS:

Moderate losses continue to hold in livestock futures as traders continue to focus on the lack of support in cash market activity through the end of August. This inability to draw buyer interest back into the market will likely limit prices from moving higher through the end of the session. Corn prices are lower in light trade. September corn futures are 2 cents lower. Stock markets are higher in light trade. The Dow Jones is 3 points higher while Nasdaq is up 43 points.

LIVE CATTLE:

Additional price pressure continues to develop through the live cattle futures with 40 to 50 cent losses quickly developing across the complex. While firm support is seen in the soon to expire August contracts. Trade volume remains sluggish across the market as traders are focusing on the continued pressure in cash cattle trade and follow through pressure in feeder cattle markets. Even though beef values remain firm, the lack of strong underlying support across the entire market through the complex is likely to limit widespread market support through futures trade. Cash cattle is starting to develop across the north through the morning Wednesday morning with dressed business seen at $165 to $166 per cwt and $105 live bases. This is $3 to $4 per cwt lower than last week dressed basis. The live trade is reported to be for delayed delivery. The Fed Cattle Exchange Auction report today listed a total of 1,777 head, with 1,140 actually sold, 456 head listed as unsold, and 181 listed as PO. The state by state breakdown looks like this: KS 286 total head, with 286 head sold at $105.00-$105.25, zero head unsold, zero head listed as PO; NE 1,049 total head (195 head live, 854 head dressed, FOB feedlot), with 854 dressed head sold at $166.00, 195 live head unsold, and zero, head listed as PO; TX 402 total head, with 0 head sold, 221 head unsold, and 181 head listed as PO ($105.00); CO no cattle reported; IA no cattle reported; other states (MO) 40 total head (Holsteins), with zero head sold, 40 head unsold, and zero head listed as PO. The delivery date/weighted average breakdown is as listed: 1-9 day delivery: 633 head total, 231 head sold, with a weighted average price of $105.10; 1-17 day delivery 55 head total, 55 head sold, with a weighted average price of $105.00; 10-17 day delivery no cattle listed; 17-30 day delivery 195 head total, zero head sold. Beef cut-outs at midday are higher, $0.56 higher (select) and up $0.17 per cwt (choice) with light movement of 86 total loads reported (42 loads of choice cuts, 10 loads of select cuts, 16 loads of trimmings, 18 loads of ground beef).

FEEDER CATTLE:

Narrow gains have held in front month August futures while moderate pressure continues to hold through the rest of the complex. This is leading to additional market weakness with September through January futures holding 50 to 80 cent losses. The overall lack of support in the complex continues to limit most buyers from showing any sense of support over the near future despite follow through support in beef values.

LEAN HOGS:

Light trade is seen through lean hog futures trade with October through February futures holding narrow to moderate gains with the focus on oversold positions moving back into the complex. The overall tone of the complex still remains weak which is limiting any long term support in deferred contacts and keeping prices under pressure. Overall volume is light and is expected to remain sluggish through the rest of the complex. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report reported 168 loads selling with prices fell $0.23 per cwt. Lean hog index for 8/28 is at $75.68 down $1.08 with a projected two-day index of $74.59, down $1.09.

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

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