DTN Midday Livestock Comments

Weakness Continues in Hog Complex

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Russ Quinn)
GENERAL COMMENTS:

Light to moderate losses are seen in most livestock trade Thursday. Live cattle futures are showing the most stability with losses seen from 20 to 50 cents per cwt through most of the morning. Hog futures continue to lead the market lower with traders focusing on the lack of buyer support willing to move back into the market following the sharp $5 per cwt market slide over the last week. Corn prices are higher in light trade Tuesday. July corn futures are 2 cents higher. Stock markets are lower in light trade. The Dow Jones is 163 points lower while Nasdaq is down 40 points.

LIVE CATTLE:

Narrow losses are holding in all cattle futures with prices seen 22 to 46 cents per cwt lower at midday due to very limited trade activity and limited direction in the market. Traders continue to look for an indication in cash market activity, which could add some increased volume to the market. But this may not move price levels, or spark any additional trade volume to move through the already quiet market structure. There is likely to be some increased movement through the end of the week, but given the recent support in the complex, prices may not move significantly through the remainder of June. Cash bids have returned to the market with no significant change over the last couple of days. Bids are seen at $108 live basis and $172 to $178 dressed. This is not likely to spark active trade at this point with the stability in futures and willingness of feeders to wait until the end of the week. Asking prices are holding at $115 live and $183 dressed. Boxed Beef cut-outs at midday are mixed, $0.37 higher (select) and down $0.89 per cwt (choice) with light movement of 53 total loads reported (27 loads of choice cuts, 15 loads of select cuts, 3 loads of trimmings, 8 loads of ground beef).

FEEDER CATTLE:

Light market erosion is seen through feeder cattle trade through the morning Thursday. Traders are showing increased market apathy with front month August futures slipping $1 per cwt at midday. This overall lack of support in the complex has little to do with wide spread market shifts or changing market direction. The inability for strong commercial support to move back into the market over the last couple hours and hesitancy to move prices above the $150 per cwt threshold is creating some moderate selling activity. Trade volume through the entire complex remains extremely light, which may add uncertainty to the entire complex over the rest of the Thursday session as well as the remainder of the week.

LEAN HOGS:

Firm pressure has been seen in most hog futures with October through April contracts holding losses near $1 per cwt at midday as the concern of demand erosion through the next six to nine months has added even more market pressure. Nearby contracts have posted a $5 per cwt loss through the week with contracts testing May lows and could continue to show additional market pressure through the rest of the month. Although August futures has not broken through initial support of $74.25 per cwt set mid-May, the lack of buyer support and general weakness in the complex may add even more softness to the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.47 at $82.08 per cwt with the range from $75.00 to $82.50 on 3,712 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.43 at $82.23 per cwt with the range from $80.75 to $82.50 on 1,197 head reported sold. The National Pork Plant Report posted 121 loads selling with carcass values falling $0.18 per cwt. Lean hog index for 6/19 is at $85.14 up 1.09 with a projected two-day index of $85.79, up 0.65.

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

(SK)

Rick Kment