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DTN Midday Livestock Comments          07/28 11:30

   Feeder Cattle Buying Pulling Cattle Prices Higher

   Strong gains in the feeder cattle futures complex have continued to lead the 
entire cattle complex higher during morning trade. Overall trade activity 
continues to remain sluggish, although the recent rally continues to spark 
buyers interest through the end of July.

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Moderate to strong gains have redeveloped through the cattle complex 
Thursday morning as buyer support in nearby feeder cattle trade has helped to 
fuel additional buyer support. The technical market support seen over the last 
week in cattle trade continues to spark additional momentum despite lackluster 
market fundamentals. Hog prices continue to erode as the market remains weak 
with little fundamental or technical support able to step back into the market. 
Corn prices are lower in light trade. September corn futures are 4 cents lower. 
Stock markets are mixed in light trade. The Dow Jones is 70 points lower while 
Nasdaq is up 2 points.

   LIVE CATTLE:

   Narrow gains are holding in live cattle trade at midday although traders 
have slowly backed away from early morning gains. The strong support in feeder 
cattle futures through the morning has helped to spark additional follow 
through gains in the live cattle complex. Given the aggressive support in all 
nearby contracts over the last week, the ability to develop and hold moderate 
gains at the end of the week will go a long way to developing market stability 
heading into August. Market fundamentals continue to lag the futures market 
trade, but the expectation of seasonal support typically seen through August is 
helping to hold recent rally together. Cash cattle trade is still undeveloped, 
although there have been a few bids surfacing through the morning. Bids are 
seen at $113 to $114 in the South and $183 in the North. Asking prices are seen 
at $118 to $120 in the South and $190 and higher in the North. It is possible 
that some trade may develop yet Thursday, but a very strong possibility that 
most trade activity will be pushed off until sometime Friday. Beef cut-outs at 
midday are lower in a narrow range $0.30 lower (select) and down $0.08 per cwt 
(choice) with moderate movement of 80 total loads reported (41 loads of choice 
cuts, 22 loads of select cuts, 4 loads of trimmings, 13 loads of ground beef).

   FEEDER CATTLE: 

   Feeder cattle futures continue to lead the cattle market Thursday morning 
with strong triple-digit gains seen early in the session sparking additional 
underlying interest concerning supply tightness through the rest of the year 
and the potential for additional commercial and investment buying willing to 
step into the market. Nearby feeder cattle futures have pulled back from early 
morning highs, but continue to hold triple-digit gains, priced just more than 
$1 per cwt higher for the day. Interest is starting to fade through the live 
cattle complex at midday due to lack of momentum in fundamentals, but so far, 
the firm but light trade in the feeder cattle complex continues to build 
momentum in the market. 

   LEAN HOGS:

   Sharp losses have redeveloped through the lean hog futures complex early 
Thursday, although traders are starting to back away from initial pressure at 
midday as prices have moved away from session lows. Narrow losses are now seek 
in most nearby contracts. Although prices have regained losses, the overall 
tone of the market remains extremely weak, and lack of additional seller 
activity moving into the market is the main focus on the midday price support. 
October futures have moved back above $60 per cwt at midday, and although this 
is still fundamentally bearish, the ability to hold this price level through 
the end of the week would go a long way in creating longer term market 
stability. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price fell $2.24 per cwt to $65.57 per cwt with 
the range from $61.00 to $65.92 per cwt on 2,548 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 142 loads 
selling with prices adding $0.55 per cwt. Lean hog index for 7/26 is at $74.89, 
down 0.76 with a projected two-day index of $74.47 down 0.42.

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


(CZ)

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