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
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.
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).
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.
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 email@example.com
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