DTN Midday Livestock Comments 06/20 12:02
Firm Pressure Continues Thursday
Active losses have moved through feeder cattle trade Thursday morning in
reaction to continued price support across corn markets. Hog futures have
quickly pulled back from midweek gains, with firm to active losses.
By Rick Kment
Firm pressure in all livestock trade has sparked renewed weakness Thursday
morning. Feeder cattle trade has led the market lower, focusing on increased
grain prices and continued concerns of production losses due to wet weather and
late planting. Corn futures are higher in moderate trade. July corn futures are
6 3/4 cents higher. Stock markets are higher in light trade. Dow Jones is 123
points higher with NASDAQ up 31 points.
Live cattle trade continues to erode through the morning as light to
moderate pressure is seen in all live cattle trade once additional volume moved
into the market and initial short covering subsided. August futures are 45
cents lower with pressure developing from lack of strong support expected in
beef values and sharp triple-digit losses in feeder cattle creating increased
market weakness across the complex. Even though prices have shifted lower
through the morning, the market is expected to remain in the current sideways
trend over the near future. Cash cattle started to develop in the South with
live prices of $110 per cwt seen. This is $2 per cwt lower than last week, and
could be enough trade to set the trend for the week. Activity in the North
remains quiet with no bids on the table at this point. Asking prices remain
firm at $112 to $115 live and $185 and higher dressed. Boxed Beef cut-outs at
midday are higher, $0.23 higher (select) and up $0.27 per cwt (choice) with
light movement of 45 total loads reported (24 loads of choice cuts, 12 loads of
select cuts, no loads of trimmings, 9 loads of ground beef).
Active pressure is moving into feeder cattle trade Thursday following new
gains in corn trade. The strong underlying support in grain prices based on
weather conditions and expected reduced production sparked triple-digit losses
in all feeder cattle futures. Although futures have pulled back from session
lows, markets still remain $1.40 to $1.60 per cwt lower based on expected feed
cost increases as well as firming pressure in live cattle trade.
Firm pressure is quickly moving into lean hog trade Thursday morning with
increased focus on widespread market pressure in all livestock trade. July
futures are leading the complex lower with a $1.37 per cwt loss at midday, as
traders quickly back away from midweek support. Renewed buyer support in grain
markets is limiting overall support, while traders are also pulling back from
recent support following no additional sales to China on the export sales
report. The fact that China exports remain hit-or-miss is not shocking to the
market. Given the country's need for pork, it makes it even more evident of its
efforts not to buy pork from the U.S. Hopes of upcoming trade talks seem to
have eased for now, but this will likely limit additional price pressure in the
next week. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price is down $1.47 at $74.93 per cwt with the
range from $67 to $76 on 4,776 head reported sold. Cash prices are unreported
due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.
Pork values bounced higher despite sharp losses in picnic cuts. Pork cutouts
added $0.83 per cwt at $78.52 per cwt with 153 loads traded. Lean hog index for
6/17 is $79.26, down 0.01, with a projected two-day index is $79.49, up 0.23.
Rick Kment can be reached at email@example.com
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