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DTN Midday Livestock Comments          07/25 12:16

   Sharp Gains Hold in Cattle Trade 

   Aggressive early-week support has flooded through the cattle complex, 
pushing October live cattle to limit higher gains. The support may continue to 
draw additional buyer support back into the market.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp gains continue to hold through the live cattle and feeder cattle 
complex. There could be some even greater support seen through the rest of the 
week based on gains in open interest that may develop. Lean hog futures have 
backed away from early support, but are holding in a moderate trading range. 
Corn prices are lower in light trade. September corn futures are 3 cents lower. 
Stock markets are lower in light trade. The Dow Jones is 98 points lower while 
Nasdaq is down 11 points.

   LIVE CATTLE:

   October live cattle futures are currently locked in limit-higher trade with 
gains of $3 per cwt showing at midday. All nearby contracts are holding gains 
of $2.50 per cwt or greater as strong buyer support is seen through the feeder 
cattle complex as well as additional buyer support flooding into all live 
cattle markets. The ability to hold these gains through the end of the trading 
session should help to draw additional buyer support through the rest of the 
week. Cash cattle markets remain at a standstill Monday morning, which is no 
surprise to anyone as show list distribution is the main order of business 
through the morning. Asking prices are not established, but expected to be near 
$117 to $119 in the South and $190 and higher in the North. Beef cut-outs at 
midday are lower $0.17 lower (select) and down $1.43 per cwt (choice) with 
moderate movement of 80 total loads reported (48 loads of choice cuts, 10 loads 
of select cuts, 12 loads of trimmings, 10 loads of ground beef).

   FEEDER CATTLE: 

   Aggressive buyer support has flooded back into the market with gains holding 
$3 to $4 per cwt through most of the morning. Nearby futures are now flirting 
with limit gains as fall contracts are trading $4.40 to $4.47 per cwt higher at 
midday. The ability to lock contracts limit higher through the end of the day 
would not only invoke expanded limits Tuesday, but could bring in additional 
buyer support which have steadily liquidated the market over the last month. 

   LEAN HOGS:

   Traders in the lean hog futures complex have slowly but steadily pulled away 
from the late-week gains seen Friday. The inability to continue to push prices 
higher is focusing on the additional pressure in fundamentals and lack of buyer 
interest moving into the market through midsummer. All nearby contracts have 
turned lower following a morning of mixed trade across the complex. This is 
leaving nearby futures 30 to 65 cents per cwt lower as traders look for 
additional long-term market direction. Cash prices are lower on the National 
Direct morning cash hog report. The weighted average price fell $1.51 per cwt 
to $67.90 per cwt with the range from $63.00 to $69.25 per cwt on 3,604 head 
reported sold. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report 
reported 156 loads selling with prices adding $0.58 per cwt. Lean hog index for 
7/21 is at $77.13, down 0.74 with a projected two-day index of $76.45 down 0.68.

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


(CZ)

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