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DTN Midday Livestock Comments          07/01 12:02

   Light Trade Activity Draws Pressure to Cattle Futures    

   Sharp triple-digit losses have quickly developed across the cattle complex 
Friday morning. The overall lack of trade activity and inability to draw 
additional interest into the market before the long holiday weekend is allowing 
for volatile price swings Friday morning. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp losses have developed across cattle trade through the end of the 
session with traders focusing on the lack of trade involvement in front of the 
long holiday weekend. Markets will remain closed Monday for the Fourth of July, 
opening at regular times Tuesday morning. Corn prices are lower. July corn 
futures are 3 cents lower. Stock markets are higher in light trade. The Dow 
Jones is 25 points higher while Nasdaq is up 20 points.

   LIVE CATTLE:

   Sharp losses have trickled into the live cattle complex at midday Friday. 
The lack of direction early in the session has quickly turned to market 
pressure. The lack of trade interest and limited trader involvement ahead of 
the holiday weekend is expected to be the main focus of the sharply lower price 
levels through the cattle complex. Even though strong cash market support was 
seen through the week, the inability to draw enough support as traders were 
willing to exit the market early may continue to drive prices lower. Cash 
cattle markets are generally quiet Friday morning following moderate trade at 
sharply higher prices Thursday. A few cattle were sold in Nebraska through the 
morning at $195 to $196 per cwt, which is steady with Thursday's prices. Bids 
are seen at $122 live basis in all areas, but so far no trade is reported. The 
expectation is that most of the cash business is likely wrapped up for the 
week, as both sides look eagerly toward the upcoming holiday weekend. Beef 
cut-outs at midday are mixed $1.43 lower (select) and up $0.22 per cwt (choice) 
with light movement of 92 total loads reported (48 loads of choice cuts, 27 
loads of select cuts, no loads of trimmings, 17 loads of ground beef).

   FEEDER CATTLE: 

   What started out as a narrowly mixed market through most of the morning has 
turned sharply lower with front month August futures holding losses of $2 per 
cwt or greater at midday. Overall market direction is being affected by the 
lack of trade activity in the complex as many traders have already left the 
market for the long holiday weekend. This light trade volume and lack of active 
trade interest could continue to allow for wild price swings through the end of 
the session. All nearby contracts are holding triple-digit losses while 
deferred futures are maintaining moderate to strong gains based on the lack of 
trade activity.   

   LEAN HOGS:

   Lean hog futures are mixed in a wide price range Friday morning due to the 
overall lack of market direction and light trade participation. Prices range 
from 65 cents lower to 77 cents higher as the few traders who are in the market 
are taking advantage of the wide market swings and reestablishing positions on 
the first day of July. Trade activity is expected to remain subdued through the 
rest of the session although price volatility may remain high. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price fell $1.39 per cwt to $76.96 per cwt with the range from $71.00 to $79.00 
per cwt on 2,625 head reported sold. Cash prices are lower on the Iowa 
Minnesota Direct morning cash hog report. The weighted average price fell $1.56 
per cwt to $77.51 per cwt with the range from $71.00 to $79.00 per cwt on 455 
head reported sold.  The National Pork Plant Report reported 169 loads selling 
with prices gaining $1.15 per cwt. Lean hog index for 6/28 is at $85.03, up 
0.17 with a projected two-day index of $84.91 down 0.12.

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


(CZ)

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