DTN Midday Livestock Comments 06/28 12:17
Live Cattle Futures Stabilize Midday
Despite sharp losses in beef values and continued pressure in feeder cattle
markets, the live cattle market is starting to show stability in light midday
trade. This could help to bring some market support to the complex through the
end of the week.
By Rick Kment
Mixed trade is starting to develop in live cattle trade as lack of selling
pressure has been seen through the complex. Despite the sharp losses in beef
cutout values, the potential for cash cattle trade to develop through the day
could help to stabilize the cattle market through the last half of the week.
Hog markets have rallied higher following a strong move higher in pork values.
Corn prices are lower in light trade. July corn futures are 2 cents lower.
Stock markets are higher in light trade. The Dow Jones is 157 points higher
while Nasdaq is up 71 points.
Live cattle futures are mixed at midday after traders were unable to bring
additional pressure back into the complex following early losses. The narrow
market moves through the complex could bring about additional stability midweek
as cash markets appear to be starting to develop in several areas. Cash cattle
trade started to trickle into the market through the North at $190 and $191 per
cwt. At this point there are just over 200 head report sold in Nebraska and 250
head sold in Iowa, which is not enough to establish a trend. But this could
create additional movement through the rest of the week. Bids are seen at $117
per cwt live basis early Wednesday. Activity on the Fed Cattle Exchange Auction
report today listed a total of 2,554 head, with 480 actually sold, 1,868 head
listed as unsold, and 206 head listed as PO. The state by state breakdown looks
like this: KS 384 total head, with 100 head sold at $119.00, 159 head unsold
and 125 head PO ($119.50); NE 1,428 total head, with 160 head sold at $120.00,
and 1,268 head unsold; TX 536 total head, with 220 head sold at $119.75, and
316 head unsold; CO 81 total head, all listed as PO ($117.00); IA 125 total
head, all unsold; other states, no test. The weighted averages are as listed:
1-9 day delivery: 320 head, with a weighted average of $119.51; 1-17 day
delivery 160 head, with a weighted average of $120.00. Beef cut-outs at midday
are lower, $2.07 lower (select) and down $4.19 per cwt (choice) with active
movement of 99 total loads reported (45 loads of choice cuts, 28 loads of
select cuts, 18 load of trimmings, 8 loads of ground beef).
Moderate pressure is holding through the feeder cattle market as traders
continue to focus on weaker cattle markets midweek with front month August
contracts holding a $1 per cwt loss at midday. The lack of support through the
complex is limiting trade interest in deferred markets, although the inability
to bring buyers back to the table may leave prices eroding quickly lower
through the rest of the week. If these market lows continue to be seen at the
end of June, traders could focus on additional market softness during early
July, concerned that open interest and additional commercial liquidation may
develop over the next couple of weeks.
Sharp gains in pork values has helped to spark additional nearby commercial
buyer support through the futures market Wednesday morning. This pushed July
and August futures to triple digit gains once again with July contract moving
$1.10 per cwt higher and trading at $87.60 per cwt. The ability to set new
contract highs continues to bring additional market interest back into not only
nearby futures trade, but also the rest of the complex. Cash prices are lower
on the National Direct morning cash hog report. The weighted average price fell
$0.81 at $85.00 per cwt with the range from $81.00 to $86.50 on 6,709 head
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash
hog report. The weighted average price fell $1.29 at $85.15 per cwt with the
range from $81.00 to $86.50 on 1,044 head reported sold. The National Pork
Plant Report reported 209 loads selling with prices adding $1.76 per cwt. Lean
hog index for 6/26 is at $91.10 up $0.48 with a projected two-day index of
$91.50 up $0.40.
Rick Kment can be reached at firstname.lastname@example.org
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