DTN Midday Livestock Comments

Market Pressure Continues Thursday

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

Firm pressure is seen in most livestock futures with front month October lean hog futures posting triple-digit losses as follow-through liquidation develops. Live cattle futures are holding losses of 30 to 70 cents per cwt, as traders see very little short-term support in market fundamentals. Corn markets are lower in light trade activity. September corn futures are 4 cents lower. Stock markets are lower in light trade. The Dow Jones is 87 points lower while Nasdaq is down 4 points.

LIVE CATTLE:

Additional losses have quickly moved into live cattle futures Thursday morning. Although volume has been very limited, the lack of support in the complex continues to spark some additional light liquidation in the complex. Sharp triple-digit pressure seen midweek has reestablished a weaker tone across the entire complex. This may add some additional pressure to the cattle market through the end of the week. Front-month August futures are holding losses of 57 cents per cwt, moving to $107.72 per cwt. Cash cattle bids have redeveloped Thursday morning in the same range as cash trade was seen Wednesday. This could bring some additional market activity through the rest of the day, although the tone of the market may likely already be set with a steady to weak market expectation. But feeders seem to be holding out for higher prices at midday, although the lack of support in futures trade may hamper those efforts. Asking prices remain firm at $113 live basis and $175 and higher dressed. Boxed Beef cut-outs at midday are higher, $0.14 higher (select) and up $0.72 per cwt (choice) with light movement of 64 total loads reported (24 loads of choice cuts, 13 loads of select cuts, 8 loads of trimmings, 19 loads of ground beef).

FEEDER CATTLE:

Follow-through pressure is seen in all but front month feeder cattle futures as the trend of lower market values has continued to limit buyer interest. August feeder cattle futures remain lightly traded with limited open interest, holding a 40 cent gain. The rest of the complex is firmly lower with losses of 25 to 50 cents per cwt as limited activity may continue to soften buyer support through the end of the week. Nearby contracts are still holding above short-term support levels set in July, but continued pressure in all livestock trade could break out of the sideways trend, and draw additional weakness into the complex.

LEAN HOGS:

Strong triple-digit losses have continued to develop in front-month October futures early Thursday morning. This has pushed prices to $52.00 per cwt after a $1.60 per cwt morning loss. The rest of the complex remains inactive with prices mixed in a narrow range. This could add some stability through the end of the week to the entire hog complex if renewed buyer support is established in deferred contracts before the end of the session. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is lower $0.97 at $37.28 per cwt with the range from $34.00 to $37.41 on 3,784 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 186 loads selling on the morning report. Pork carcass values fell $0.87 per cwt at $65.03 per cwt. Lean hog index for 8/21 is at $50.01 down 0.70 with a projected two-day index of $49.50, down 0.51.

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

(SK)

Rick Kment