DTN Midday Livestock Comments

Firm Gains Develop in Cattle Futures in End of Week Positioning

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

Firm gains have developed in cattle trade Friday as traders are trying to counter the aggressive losses that swept through the complex Thursday afternoon. This may bring follow-through buyer activity within the next couple hours of trade in both live cattle and feeder cattle contracts. Corn prices are lower in light trade. September corn futures are 7 cents higher. Stock markets are lower in light trade. The Dow Jones is 53 points lower while Nasdaq is down 5 points.

LIVE CATTLE:

Moderate buyer support has slowly moved into live cattle futures trade with the focus on increased buyer interest seen through the entire complex. Nearby futures are holding gains of 45 to 70 cents per cwt at midday, while lack of interest is seen in other nearby contracts with prices holding gains of 20 to 40 cents per cwt. The overall lack of support in the complex Thursday led to aggressive pressure. But the ability to regain a portion of these losses at the end of the week could go a long way in adding stability to the cattle market next week and through the end of July. Cash cattle trade is undeveloped through the morning, as traders appear to be waiting for the cattle on feed report release Friday afternoon before stepping back into the market. Bids through the North are seen at $118 live and $188 dressed, which is currently $1 to $2 per cwt lower than last week. This could point toward steady money by the end of the week given the support in futures trade and unwillingness for feeders to budge at this point. Asking prices remain at $121 to $122 in the South and $190 and higher in the North. Beef cut-outs at midday are lower, $0.99 lower (select) and down $0.74 per cwt (choice) with active movement of 90 total loads reported (56 loads of choice cuts, 14 loads of select cuts, 8 loads of trimmings, 12 loads of ground beef).

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Feeder Cattle:

Firm buyer support is holding in feeder cattle futures Friday morning with nearby contracts posting gains of $1 to $1.20 per cwt as the focus on underlying market support remains the main focus in all cattle trade after the sharp losses seen Thursday. Activity levels remain light as traders continue to look for additional longer term direction across the complex. The volatile and wild market shifts seen over the last couple of weeks have created such a back and forth shift in daily trade that these type of moves are almost expected.

LEAN HOGS:

Light trade continues to be seen through the entire lean hog complex Friday morning with August futures holding strong underlying support of 67 cents per cwt. This is sparking some light to moderate buyer support through most other contracts with all but December contracts trading steady to 25 cents per cwt higher. The overall lack of pressure in the complex at the end of the week is helping traders square positions with nearby contracts stuck in the moderate to wide trading range seen over the last couple of weeks. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.14 at $83.07 per cwt with the range from $78.00 to $84.50 on 3,998 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.46 at $83.39 per cwt with the range from $78.00 to $84.50 on 1,840 head reported sold. The National Pork Plant Report reported 141 loads selling with prices falling $1.07 per cwt. Lean hog index for 7/19 is at $92.00 down $0.40 with a projected two-day index of $91.67, down $0.33.

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

(BE)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]