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DTN Midday Livestock Comments          07/29 11:50

   Cattle Futures Shake off Early Market Pressure          

   The early pressure seen in cattle trade has eroded quickly at midday, 
although the overall tone of the live cattle complex remains soft given the 
underlying concern of just how much additional beef demand will be seen over 
the near future. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Early pressure in cattle futures has eroded as traders are focusing on the 
continued beef market support following light to moderate gains in boxed beef 
values. This is pushing feeder cattle futures firmly higher, and helping to 
move further away from early pressure in the live cattle market. Lean hog 
futures are mixed as strong nearby gains are being offset by pressure 
developing in 2016 contract months. Corn prices are lower in light trade. 
September corn futures are 2 cents per bushel lower. Stock markets are higher 
in light trade. The Dow Jones is 136 points higher while Nasdaq is up 33 points.

   LIVE CATTLE:

   Light gains have surfaced at midday through the live cattle futures as 
firming buyer support across the feeder cattle futures have helped to erase 
early market pressure. The tone of the market still remains extremely 
defensive, although there is the sense of hope that gains Tuesday could be able 
to build some additional traction into the market needed to propel buyer 
support not only at the end of July, but also through early August. This could 
help to spark some additional buyer activity late in the trading session also. 
Cash cattle activity remains quiet with bids redeveloping in the South at $143 
per cwt. The lack of additional activity may push trade to the end of the week 
as feeders are still holding tight to asking prices near $148 in the South and 
$236 and higher in the North. Beef cut-outs at midday are higher, 0.27 higher 
(select) and up 0.52 per cwt (choice) with light movement of 110 total loads 
reported (63 loads of choice cuts, 23 loads of select cuts, 8 loads of 
trimmings, 16 loads of ground beef).

   FEEDER CATTLE:

   Buyer support has continued to gain ground through the feeder cattle market 
Wednesday morning as traders try to dig out of the recent pressure seen over 
the last week. The slow but steady support in beef values is creating some 
momentum through the complex, and has helped to push prices over $1 per cwt 
higher during late-morning trade. This is creating additional support through 
the complex and drawing buyers back into the live cattle complex midday 
Wednesday. 

   LEAN HOGS:

   Strong support seen in nearby contracts has faded a bid through late morning 
following fundamental pressure in both pork values and cash prices at the end 
of the week. This could lead to additional market pressure over the rest of the 
trading session as buyers continue to focus on increased activity through the 
end of the month. October contracts continue to hold triple digit gains, but 
the $14 per cwt discount to the August contract seems to be the main driver of 
buyer support at this point. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $2.23 per cwt to 
$72.55 per cwt with the range from $65.00 to $76.00 per cwt on 3,302 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 307 loads selling with prices falling $1.51 per cwt. Lean hog index 
for 7/27 is at $78.36 down 0.17, with a projected two-day index of $78.33 down 
0.03.  

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


(BAS)

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