DTN Midday Livestock Comments

Hog Futures Shift Lower Monday

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

Light buyer activity is slowly trickling back into cattle futures with deferred markets holding gains at midday. The pressure in front-month futures is focusing on the selling activity seen in lean hog futures as well as pressure in several outside markets through the morning. Corn markets are lower in light trade activity. September corn futures are 3 cents lower. Stock markets are higher in active trade. The Dow Jones is 96 points higher while Nasdaq is up 4 points.

LIVE CATTLE:

Narrow gains have redeveloped in deferred live cattle futures with prices 10 to 20 cents per cwt in most contract months. There continues to be limited pressure holding on in front-month August futures as traders continue to focus on the pressure in outside markets. But the firm tone set at the end of last week in live cattle futures is helping to bring some needed stability to the complex. At this point, it is uncertain if this support will carry through cash cattle markets, but the firm tone seen in beef values is sparking interest based on the ability to draw on seasonal support. Cash cattle activity remains extremely quiet with show list distribution and inventory taking seen through the morning. Trade last week developed late in the week with prices generally $1 to $2.50 per cwt lower than the previous week. This has continued to create caution in most traders' minds. Bids and asking prices are undeveloped at this point, and likely to remain quiet until midweek. Boxed Beef cut-outs at midday are higher, $0.59 higher (select) and up $1.98 per cwt (choice) with light movement of 53 total loads reported (28 loads of choice cuts, 15 loads of select cuts, 6 loads of trimmings, 4 loads of ground beef).

FEEDER CATTLE:

Limited buying has slowly developed through late morning with traders moving away from the narrow losses seen just after opening bell. August futures remain lightly traded with most of the open interest moving to September contracts. But front-month futures are still holding a 62 cent loss due to the inactivity. The rest of the complex remains slightly higher with gains of 15 to 30 cents per cwt. Additional market interest may slowly develop through the rest of the morning.

LEAN HOGS:

Strong triple-digit losses have quickly developed through the nearby lean hog complex with October futures holding a $2.15 per cwt loss. This has moved prices back to $56.50 per cwt. This is still a strong market surge following the continued buyer activity seen through the last week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.51 at $40.07 per cwt with the range from $38.00 to $40.50 on 2,815 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report is unreported at this time. Lean hog index for 8/16 is at $52.94 down 1.27 with a projected two-day index of $51.51, down 1.43.

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

(SK)

Rick Kment