DTN Midday Livestock Comments 07/20 12:01
Pressure Develops Friday in All Livestock Trade
Lower prices have developed in cattle and hog markets Friday morning.
Traders are preparing for the upcoming cattle on feed report Friday afternoon,
which is limiting support in cattle trade. Hog markets remain extremely weak
following recent price pressure.
By Rick Kment
Price pressure has developed in all livestock markets with traders looking
for increased market direction next week. The release of the cattle on feed
report is causing some late-week position taking as traders don't expect a
major shift in the report, but seem to be trying to prepare for anything. Hog
markets continue to erode as contracts have set contract lows once again with
little support expected to be seen. Corn prices are higher in light trade
Friday. July corn futures are 3 cents higher. Stock markets are higher in light
trade. The Dow Jones is 25 points higher while Nasdaq is up 7 points.
Narrow losses have moved into the live cattle complex after prices have
bounced higher and lower through the lightly traded morning session. Traders
are looking for additional direction in both cash cattle trade at the end of
the week, and the afternoon release of the cattle on feed report. This may add
some volatility to the market early next week, but the underlying firm tone
seen over the last couple weeks is still expected to hold. Cash cattle bids
have been floated at the same price levels as seen earlier in the week. The
lack of movement so far midday Friday is expected to push trade off until after
the cattle on feed report at 2 pm central time. Bids remain at $108 live and
$173 dressed. Asking prices are not budging either, leaving a wide gap between
the two levels with asking prices at $114 and higher live and $180 and up
dressed. Boxed Beef cut-outs at midday are lower, $0.17 lower (select) and down
$0.57 per cwt (choice) with light movement of 58 total loads reported (26 loads
of choice cuts, 4 loads of select cuts, 9 loads of trimmings, 18 loads of
Moderate losses have continued to develop through the feeder cattle futures.
This has added increased weakness to the market with August futures leading the
market lower with an 85 cent per cwt loss. The recent market support that has
helped to sustain additional buyer support through the week, is being countered
to the uncertainty on the upcoming cattle on feed report Friday afternoon.
Trade is expected to remain extremely limited through the rest of the session.
Sharp losses have continued to add market pressure to the August complex,
which is weakening all markets. Triple-digit losses are seen across the entire
complex with prices falling $1.20 to $1.60 per cwt at midday. The inability to
sustain any support that tried to redevelop Thursday is causing many traders to
view the market even more bearish than previously expected. This could add
increased pressure through next week as prices have already set contract lows
once again. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price is down $0.88 at $68.37 per cwt with the
range from $64.00 to $70.00 on 5,231 head reported sold. Cash prices are
unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog
report. The National Pork Plant Report posted 173 loads selling with carcass
values falling $1.83 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 firstname.lastname@example.org
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