DTN Midday Livestock Comments 07/07 11:58
Cattle Futures Slip Lower in Sluggish Trade
Softness through the cattle complex has followed additional outside market
weakness that continues to develop as traders remain concerned about global
economic conditions. Trade volume is likely to be light through the rest of the
By Rick Kment
Moderate losses are holding through the cattle complex as traders continue
to focus on the uncertainty in outside markets as well as weaker beef values.
Nearby lean hog futures are holding onto early gains, but it remains uncertain
if there will be enough follow through support to hold these gains. Corn prices
are lower in light trade. September corn futures are 4 cents per bushel lower.
Stock markets are lower in light trade. The Dow Jones is 70 points lower while
Nasdaq is down 42 points.
Pressure is still holding in the live cattle futures. The lack of support
through the rest of the commodity markets combined with moderate to strong
pressure in the boxed beef values is creating some additional softness through
the rest of the market. Trade volume is expected to remain sluggish through the
remainder of the trading session as traders seem to have found a temporary
range, and are willing to hold until later in the week. Cash activity remains
quiet with bids still undeveloped. It is likely to be the second half of the
week before sales start to develop. Asking prices are around $153 and higher in
the South and $245 and higher across the North. Beef cut-outs at midday are
lower, 2.24 lower (select) and down 0.99 per cwt (choice) with light movement
of 69 total loads reported (28 loads of choice cuts, 25 loads of select cuts,
zero loads of trimmings, 15 loads of ground beef).
Moderate pressure continues to hold through the morning after the initial
buyer support quickly backed away from the table during early trade. This could
help to draw additional volume into the market, although losses continue to
remain limited, and could remain between 50 and 80 cents per cwt until market
settles at 1 p.m.
Light to moderate buyer support continues to remain rooted in nearby lean
hog futures as traders continue to focus on the potential for a post-holiday
market rally. The expectation that additional but moderate cash market support
may continue to hold in cash hog values over the next few days is helping to
push nearby lean hog futures near the $80 per cwt level. It is unlikely that a
significant move higher will develop over the near future based on the
availability of hogs in the market, but this could spark some additional
rebuilding trough the entire complex. Cash prices are lower on the National
Direct morning cash hog report. The weighted average price fell $1.58 per cwt
to $73.21 per cwt with the range from $70.00 to $76.00 per cwt on 3,158 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $3.17 per cwt to $73.96 per cwt
with the range from $70.00 to $76.00 per cwt on 148 head reported sold. The
National Pork Plant Report reported 218 loads selling with prices slipping
$0.26 per cwt. Lean hog index for 7/2 is at $77.13 up 0.09, with a projected
two-day index of $77.43 up 0.30.
Rick Kment can be reached at firstname.lastname@example.org
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