DTN Midday Livestock Comments

Triple-Digit Rally Sparks Support

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

Sharp end-of-week buyer support has flooded into livestock markets. This price rally has helped to spark some increased commercial trade activity, although there remains uncertainty if increased volume will be develop and confirm market gains. Corn markets are higher in light trade activity. September corn futures are 3 cents higher. Stock markets are mixed in light trade. The Dow Jones is 84 points higher while Nasdaq is down 7 points.


Triple-digit gains have quickly and aggressively moved into nearby live cattle trade. This is helping to bring some underlying support back into the complex with traders looking for the ability to spark some additional support through the entire cattle market over the near future. October futures are leading the complex higher with a $1.80 per cwt rally. This is moving all nearby contracts above the $110-per-cwt trading range, and helping to bring longer-term support back to the complex. Cash cattle activity remains sluggish with bids increasing through the morning, but this is still unable to spark any significant interest from feedlot managers. Bids are seen from $108 to $110 live and $173 to $176 dressed. Asking prices remain unchanged $114 and higher live basis and $182 to $183 dressed. Boxed Beef cut-outs at midday are higher, $0.86 higher (select) and up $0.75 per cwt (choice) with light movement of 52 total loads reported (20 loads of choice cuts, 9 loads of select cuts, 16 loads of trimmings, 7 loads of ground beef).


Firm underlying buyer support has replaced early pressure in feeder cattle trae. This is moving nearby contracts $1 per cwt higher based on the aggressive buyer support in the live cattle complex. Although the tone of the market remains unsettled given the wide market shifts seen over the last couple of weeks, the ability to end the week on a positive note could quickly change the overall direction during the month of August.


Front-month August contracts remain lightly traded with most of the interest and activity moving into October through February futures trade. This is keeping spot-month August contracts under light pressure with markets holding a 20 cent loss at midday. The rest of the complex has surged higher with triple-digit gains moving into the market as traders try to adjust to the recent losses seen through the complex. October futures are leading the market higher with gains near $2 per cwt through most of the morning. This may not have long-term influence in the market, but is quickly pulling prices off of contract lows. If follow-through support develops early next week, the complex has a chance at a moderate technical shift higher through the next couple of weeks. 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 weighted average price is down $1.33 at $56.30 per cwt with the range from $55.00 to $57.50 on 586 head reported sold. The National Pork Plant Report posted 139 loads selling with carcass values falling $0.41 per cwt. Lean hog index for 8/1 is at $68.91 down 1.07 with a projected two-day index of $67.57, down 1.34.

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


Rick Kment