DTN Midday Livestock Comments

Triple-Digit Gains Sweep Through Livestock Trade

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

Strong gains have redeveloped in livestock trade Thursday. Traders had very little reason to add to the losses seen Wednesday which were driven by overall market emotion and the concern that additional tariffs would spark long-term pressure. But with little to no specifics on details and wide-ranging opinions the main criteria, traders moved back to focus on overall trend and fundamental factors. Corn prices are higher following the Supply and Demand Report Thursday. July corn futures are 8 cents higher. Stock markets are higher in light trade. The Dow Jones is 226 points higher while Nasdaq is up 88 points.

LIVE CATTLE:

Triple-digit gains have moved into live cattle markets early in the Thursday session as traders are in a reactionary mode following the sharp losses seen Wednesday. This may add some market pressure to the complex late in the week if cash markets are unable to firm, or additional outside market pressure returns to the market. But wide market shifts higher and lower may be evident through much of July as increased uncertainty seems to be the main focus in all meat markets as well as commodities in general. Cash cattle markets are still quiet with bids redeveloping at the same level as seen earlier in the week. Live bids are seen at $108 per cwt while dressed bids in the North are posted at $175 per cwt. Feeders are unwilling to chase these bids at this point, with asking prices are seen at $114 to $116 live, and $183 dressed. It is expected to be sometime Friday before trade redevelops. Boxed Beef cut-outs at midday are lower, $0.34 lower (select) and down $0.82 per cwt (choice) with moderate movement of 66 total loads reported (38 loads of choice cuts, 14 loads of select cuts, 4 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Firm gains are seen in feeder cattle futures as traders continue to focus on the renewed buyer support moving back into the live cattle futures. The lack of follow through pressure following midweek losses and concerns about demand shifts surrounding the trade war seemed to refocus on overall market fundamentals, bringing buyers back to the market. The sharp gain in corn prices following the USDA supply and demand report has limited trade activity.

LEAN HOGS:

Strong gains continue to hold at midday in most lean hog futures trade. Although front-month contracts are holding narrow price shifts with a 25 cent gain, the limited volume in spot contracts is limiting market movement. August futures are holding a $1.70 per cwt gain with increased support likely to hold through the end of the session as traders view the hog complex as extremely oversold, even with the uncertainty in the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.73 at $75.36 per cwt with the range from $68.00 to $76.00 on 5,270 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 144 loads selling with carcass values gaining $0.26 per cwt. Lean hog index for 7/10 is at $81.52 down 0.15 with a projected two-day index of $81.26, down 0.26.

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

(SK)

Rick Kment