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DTN Midday Livestock Comments          07/26 12:05

   Cattle Trade Regains Support at Midday 

   Early pressure seen through the cattle complex Tuesday morning has been 
washed away by another round of buyer interest moving into the complex. This is 
pushing nearby contracts to triple-digit gains, building on the momentum seen 
over the last two trading sessions. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Strong midday buyer interest has redeveloped across the cattle complex 
Tuesday morning following mixed early trade. The focus on additional buyer 
support and potential to expand market gains even further through the first 
half of the week has cleared any initial seller activity away from the market 
and pushed nearby contracts to triple digit gains. Hog futures continue to hold 
moderate losses as traders remain concerned about still weak market 
fundamentals. Corn prices are lower in light trade. September corn futures are 
2 cents lower. Stock markets are mixed in light trade. The Dow Jones is 35 
points lower while Nasdaq is up 8 points.

   LIVE CATTLE:

   Live cattle futures spend most of the morning with mixed price ranges as a 
combination of position squaring met continued buyer support seen over the last 
two trading sessions. Once market positioning was done, firm gains have 
redeveloped with triple-digit gains holding in nearby contracts. There may 
continue to be some additional market support developing late in the session as 
the recent momentum of buyer activity seems to be sparking additional 
widespread interest across all contracts. Cash cattle trade is still silent 
which is not unexpected for a Tuesday, although there are a few bids surfacing 
through the morning at $185 in the North. This is not likely to get much 
attention given the support in futures and beef values, but could help to start 
the ball rolling for later in the week. Beef cut-outs at midday are higher 
$1.87 higher (select) and up $1.44 per cwt (choice) with moderate movement of 
85 total loads reported (52 loads of choice cuts, 19 loads of select cuts, 9 
loads of trimmings, 6 loads of ground beef).

   FEEDER CATTLE: 

   The initial lack of movement in the cattle complex has shifted as the 
trading session has continued, allowing triple-digit gains to redevelop at 
midday. Although at this point there is no indication that traders will take 
advantage of the expanded trading limits, the move to $1.50 per cwt gains is 
helping to build even more support under the recent rally which has developed. 
The focus through all cattle markets is expected to be moving away from summer 
market pressure and the potential of an August market rally, which could not 
only draw additional open interest back into the market, but propel additional 
beef-buying activity. 

   LEAN HOGS:

   Moderate pressure had developed in nearby contracts early Tuesday morning, 
and this lack of support has continued to build through the morning. All 
contracts through April 2017 are now holding moderate losses with front-month 
August futures leading the complex lower with a 70 cent per cwt loss. The lack 
of underlying follow through support by futures traders as well as the 
inability to change the direction of cash or pork value prices is leaving many 
traders unwilling to step back into the market Tuesday. Cash prices are lower 
on the National Direct morning cash hog report. The weighted average price fell 
$0.90 per cwt to $67.48 per cwt with the range from $63.00 to $69.00 per cwt on 
3,700 head reported sold. Cash prices are lower on the Iowa Minnesota Direct 
morning cash hog report. The weighted average price fell $0.82 per cwt to 
$68.36 per cwt with the range from $67.25 to $69.00 per cwt on 425 head 
reported sold. The National Pork Plant Report reported 177 loads selling with 
prices falling $0.23 per cwt. Lean hog index for 7/22 is at $76.45, down 0.68 
with a projected two-day index of $75.65 down 0.80.

   Rick Kment can be reached at rick.kment@dtn.com 


(CZ)

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