DTN Midday Livestock Comments

Cattle Futures Continue Lower

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

Strong triple-digit losses have swept through the cattle complex Friday morning with increased pressure possible early next week. Lean hog futures remain firm to moderately higher with the most aggressive support developing in early 2019 contract months. Corn markets are higher in light trade activity. September corn futures are 2 cents lower. Stock markets are higher in light trade. The Dow Jones is 146 points higher while Nasdaq is up 64 points.

LIVE CATTLE:

Strong pressure has quickly developed across the live cattle complex. October contracts are leading the market lower with a $2 per cwt loss as traders have quickly shifted from the narrowly mixed trading range seen early in the session, to aggressive triple-digit losses in all nearby contracts. There is expected to be very little volume in the market, although the overall tone of the market remains unsettled as traders move to the lower end of the sideways market trend seen through the summer. A break below $105.90 per cwt in October futures could spark additional pressure through the entire complex. Cash cattle remain quiet with active trade likely wrapped up for the week, although some clean up activity may continue to develop. With prices for the week generally steady in the North and $1 to $1.50 per cwt lower in the South, any additional market shifts will likely be pushed off until next week. Boxed Beef cut-outs at midday are lower, $1.12 lower (select) and down $1.17 per cwt (choice) with light movement of 63 total loads reported (26 loads of choice cuts, 6 loads of select cuts, 19 loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:

Strong market losses have continued to develop in feeder cattle trade Friday morning with very limited volume expected through the rest of the session. August futures remain very limited due to light open interest, while all other contracts holding triple-digit losses of $1.40 to $1.70 per cwt. This may add additional bearish tones to the entire livestock complex.

LEAN HOGS:

Lean hog futures are showing late day short covering activity Friday morning. This is helping to spark some additional stability in the complex, although the sideways tone seen in the lean hog complex continues to hold. Narrow gains in cash hog values has helped to draw additional activity in nearby contracts with early 2019 contracts holding triple-digit gains. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.09 higher at $37.35 per cwt with the range from $34.00 to $37.41 on 3,401 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is $0.18 Lower at $37.35 per cwt with the range from $34.00 to $37.50 on 202 head reported sold. The National Pork Plant Report posted 158 loads selling on the morning report. Pork carcass values remains unchanged per cwt at $64.85 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