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DTN Midday Livestock Comments          08/23 12:03

   Nearby Hog Futures Slip Lower Midday

   Early support in the lean hog futures complex was quickly dashed as prices 
have moved from moderate gains to strong losses. Lack of fundamental support in 
all livestock markets is limiting trade volume through most of the complex. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Moderate to widespread losses are seen through the livestock market late 
Tuesday morning. Early support in lean hog futures has quickly eroded, opening 
the door for additional strong losses as markets are showing triple-digit 
losses in a couple contracts. Corn prices are lower in light trade. September 
corn futures are 3 cents lower. Stock markets are higher in light trade. The 
Dow Jones is 36 points higher while Nasdaq is up 19 points.

   LIVE CATTLE:

   Deferred live cattle futures appear to be in the driver's seat early Tuesday 
with moderate to strong losses seen in 2017 contract months. The focus has 
moved quickly away from current beef supplies and the ability to move product 
in retail outlets, to the long-term market uncertainty of sustaining meat 
demand over the next several months. Contract in late 2017 are trading below 
$103 per cwt, which creates significant concern about the ability to draw 
widespread support into the complex long term. Cash cattle markets are showing 
a bit of life early Tuesday with a few bids seen in the South at $115 per cwt. 
At this point it appears that current bids are well below asking prices of $120 
and higher, and also last week's trade. But given that packers are starting out 
earlier than usual, could indicate they will be more aggressive through the 
week. Bids are undeveloped in the North, while asking prices are expected to be 
at $190 and higher. Beef cut-outs at midday are mixed $0.36 higher (select) and 
down $0.57 per cwt (choice) with light movement of 76 total loads reported (46 
loads of choice cuts, 15 loads of select cuts, 5 loads of trimmings, 10 loads 
of ground beef). 

   FEEDER CATTLE: 

   Feeder cattle futures continue to erode slowly through the morning with very 
little additional market support seen across the market. Even the pressure in 
corn markets Tuesday has been unable to spark any additional interest to 
venture into the market. This could keep prices sluggish through most of the 
session as moderate losses are holding at midday.  

   LEAN HOGS:

   Moderate price erosion continues to be seen across the lean hog futures 
complex Tuesday morning. The overall lack of support in both pork values and 
cash markets has brought renewed pressure to the market. Even though prices 
held together relatively well through most of the morning, that has quickly 
changed at midday with nearby contracts holding losses near $1 per cwt. The 
overall lack of technical and fundamental support is offsetting any sense of 
oversold market status the market may have. This could bring additional 
uncertainty to the entire complex. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $0.93 per cwt to 
$61.47 per cwt with the range from $56.00 to $63.00 per cwt on 3,631 head 
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash 
hog report. The weighted average price fell $1.05 per cwt to $62.37 per cwt 
with the range from $56.00 to $63.00 per cwt on 1,326 head reported sold. The 
National Pork Plant Report reported 210 loads selling with prices falling $0.19 
per cwt. Lean hog index for 8/19 is at $67.02, down 0.20 with a projected 
two-day index of $66.96 down 0.06.

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


(CZ)

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