DTN Midday Livestock Comments 07/19 11:47
Sluggish Market Moves Seen Thursday Morning
Little market direction has developed at midday as early short covering in
lean hog futures has run its course. Cattle and hog futures remain mixed in a
narrow range, limiting additional market developments through the rest of the
By Rick Kment
Wide market shifts in lean hog futures seen early Thursday morning has
reverted back to narrowly mixed price levels as traders seem to have slowed
interest following the ability to cover initial short positions. Cattle markets
are undeveloped in futures and cash trade with futures markets holding narrowly
mixed moves. Corn prices are higher in light trade Tuesday. July corn futures
are 3 cents higher. Stock markets are lower in light trade. The Dow Jones is 91
points lower while Nasdaq is down 20 points.
Strong gains seen earlier in the week have been limited by lackluster
interest Thursday morning. Live cattle futures are stuck in a narrow, but
sideways trading range during the first half of the session with prices seen
from 22 cents lower to 20 cents higher. Narrow gains have offset morning losses
in nearby contracts, as any position squaring following triple-digit market
surges earlier in the week seem to be eroding. Little new market direction is
seen across any live cattle contracts with traders focusing on the upcoming
cattle on feed report and expectations of firming supplies over the next
several months. Cash cattle bids have redeveloped in a similar range as seen
earlier in the week, but at this point, packers seem unwilling to close the gap
between bids and asking prices. This could limit any trade from developing
until Friday. Bids are seen at $108 live and $170 to $173 dressed. Asking
prices are holding at $114 and higher live and $180 and up dressed. Boxed Beef
cut-outs at midday are higher, $0.27 Higher (select) and up $0.21 per cwt
(choice) with light movement of 77 total loads reported (31 loads of choice
cuts, 16 loads of select cuts, no loads of trimmings, 30 loads of ground beef).
Midday trade in feeder cattle futures is steady in nearby contracts. This is
adding additional market uncertainty to the complex following a pullback in
buyer interest through the morning. All remaining 2018 contracts are holding at
$154 per cwt, with nearby contracts stuck in a very narrow trading range at
midday from 15 cents lower to 12 cents higher.
Sharp gains seen early in the session Thursday have quickly eroded as buyer
support has run out of gas, leaving uncertainty through the entire complex.
Traders may focus on the inability to hold gains as a sign that increased
market weakness may quickly develop across the complex in the near future.
Trade volume remains extremely sluggish in all lean hog market contracts, which
will add to price shifts over the next couple of days. Cash prices are lower on
the National Direct morning cash hog report. The weighted average price is down
$1.35 at $69.22 per cwt with the range from $65.00 to $70.50 on 5,208 head
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash
hog report. The weighted average price is down $1.48 at $69.39 per cwt with the
range from $65.00 to $70.50 on 3,310 head reported sold. The National Pork
Plant Report posted 155 loads selling with carcass values adding $0.25 per cwt.
Lean hog index for 7/17 is at $79.15 down 0.54 with a projected two-day index
of $78.62, down 0.53.
Rick Kment can be reached at email@example.com
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