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DTN Midday Livestock Comments          08/21 12:02

   Hog Futures Rally Higher  

   Aggressive early losses in lean hog futures have been replaced by aggressive 
buying support. Traders are looking for additional direction across the cattle 
complex before the end of the session.  

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Livestock futures are mixed with strong gains redeveloping in the lean hog 
futures. Live cattle futures contain limited pressure at midday after bouncing 
off of session lows. Corn futures are higher at midday. September corn futures 
are 2 cents per bushel lower. Stock markets are higher in light trade. The Dow 
Jones is 67 points higher while Nasdaq is up 2 points.

   LIVE CATTLE:

   Livestock futures are moving well off of session lows, although narrow 
losses in the nearby live cattle complex seems to be creating some additional 
support. The strong shift higher in lean hog futures has created some spill 
over buyer support in nearby live cattle futures. This move could continue 
limit trade activity through the remainder of the session. Cash markets 
continue to draw light to moderate trade back into the market. Sales of $153 
per cwt are seen in Kansas, which is $2 per cwt lower than last week, but $1 
higher from Wednesday's level. Bids are seen again at $240 to $242 per cwt. 
Activity may continue to trickle through the market through the end of the 
week, especially given the midday support in futures prices. Asking prices are 
near $157 and higher in the South and $248 to $250 per cwt in the North. Beef 
cut-outs at midday are lower, 0.58 per cwt lower (select) and down $1.03 per 
cwt (choice) with active movement of 101 total loads reported (44 loads of 
choice cuts, 34 loads of select cuts, 11 loads of trimmings, 12 loads of ground 
beef).

   FEEDER CATTLE:

   Feeder cattle futures bounced well off of session lows at midday, but it is 
uncertain if this renewed support will be able to hold through the end of the 
session. Traders have allowed nearby contracts to revert back to losses of $2 
per cwt lower or greater as uncertainty about beef market support and 
additional noncommercial liquidation continues to develop. August futures 
remain mixed in a narrow range, but very little attention is still being placed 
on front month futures with September through November contracts gaining the 
most attention. 

   LEAN HOGS:

   Despite moderate pressure through most of the morning, a midday turnaround 
quickly swept through the lean hog futures market, pushing nearby contracts 
nearly $1 per cwt higher. Firming pork values in the morning report may not 
have changed the support of the market, but traders are now focusing on the 
fact that lean hog markets have been well oversold given the little additional 
information that is available concerning both supplies and demand for hogs. 
This could help to sustain additional late day support in all nearby contracts. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price fell $0.44 per cwt to $96.67 per cwt with the range from 
$87.00 to $96.99 per cwt on 3,345 head reported sold. Cash prices are 
unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog 
report. The weighted average price fell $3.56 per cwt to $95.95 per cwt with 
the range from $93.50 to $99.00 per cwt on 550 head reported sold. The National 
Pork Plant Report is reported 180 loads selling as prices up $0.77 per cwt. 
Lean hog index for 8/20 is at 109.25 down 1.90, with a projected two-day index 
of $107.19 down 2.08.

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


(SK)

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