DTN Midday Livestock Comments 07/25 12:20
Cattle Futures Turn Lower Midday Tuesday
Cattle futures turned lower late morning, which pulled away from early
morning support. This is quickly limiting buyer support from the cattle market
that had helped to bring a sense of stability back into the market Tuesday
By Rick Kment
Firm pressure is quickly moving into the cattle contracts following firm
support seen early through the morning. The lack of follow through support
holding in the session could add pressure to all markets. Lean hog futures is
adding market softness to the complex. Corn prices are lower in light trade.
September corn futures are 6 cents lower. Stock markets are higher in light
trade. The Dow Jones is 133 points higher while Nasdaq is up 4 points.
Light to moderate pressure is developing in live cattle futures following
early support which first moved into the cattle market Tuesday. This inability
for buyers to stay involved in the market is concerning to the market and could
spark follow through losses in the last hour of trade. Front month August
futures are holding single digit losses, although deferred futures have posted
more aggressive pressure with increased momentum may continue to be seen. Cash
cattle activity is still quiet with bids and asking prices poorly defined. It
is expected that asking prices will start at $122 live basis and $192 dressed
although active trade will likely be delayed until midweek or later. Beef
cut-outs at midday are mixed, $1.44 higher (select) and down $0.20 per cwt
(choice) with light movement of 55 total loads reported (32 loads of choice
cuts, 9 loads of select cuts, 9 loads of trimmings, 6 loads of ground beef).
Feeder cattle futures have backed away from early gains at midday as traders
continue to chop around in a moderate trading range Tuesday morning. August
futures have posted a $1.30 per cwt loss adding to the limit losses seen
Monday. The pullback from firm early morning gains continues to create
uncertainty on the stability of the market that some thought would be
established in the market through the morning session. Further pressure could
spark additional liquidation through the end of the trading day.
Light trade is seen in lean hog futures markets with prices moving very
little since opening bell. Nearby futures are holding moderate gains with
August futures holding a firm gains of 65 cents per cwt holding near $81 per
cwt. Deferred futures continue to hold narrow losses as extremely light trade
volume is seen in all deferred contract months. This will limit additional
movement through the rest of the session and may hinder movement through the
rest of the week. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price fell $0.91 at $81.48 per cwt with the range
from $77.00 to $83.74 on 4,349 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 259 loads selling with prices gaining
$1.53 per cwt. Lean hog index for 7/21 is at $91.13 down $0.54 with a projected
two-day index of $90.44, down $0.69.
Rick Kment can be reached at firstname.lastname@example.org
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