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DTN Midday Livestock Comments          08/30 11:56

   Cattle Markets Hold Triple-Digit Losses 

   Early mixed trade in live cattle markets have quickly eroded due to further 
pressure in cash cattle trade and soft beef values. Triple-digit losses are 
seen across the complex as traders look for additional market direction late in 
the week. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Trade volume remains light early Tuesday as early support in hog futures is 
being eroded by the lack of additional market direction and bearish influence 
from outside markets such as cattle and corn prices. Triple-digit losses are 
holding in live and feeder cattle futures, limiting the ability to bring buyers 
back to the table. Corn prices are lower in light trade. September corn futures 
are 6 cents lower. Stock markets are lower in light trade. The Dow Jones is 53 
points lower while Nasdaq is down 11 points.

   LIVE CATTLE:

   Even though prices started out mixed in a narrow range through the first 
half of the morning, there has been little to no long-term support developing 
in the market. This quickly eroded any support that may have been hanging 
around the live cattle market, pushing prices to triple-digit losses at midday 
in most contracts. Cash cattle trade continues to trickle into the market as 
light trade developed through the north Tuesday morning with prices at $175 
dressed basis. This is about $1 to $2 per cwt below Monday's price levels, 
creating the potential that cash markets may slowly develop through the week 
with no significant market activity on any given day. Bids of $110 per cwt are 
seen in the South, which may gain momentum, even though prices are sharply 
lower than week-ago levels in both the North and South. Beef cut-outs at midday 
are lower $0.84 lower (select) and down $0.83 per cwt (choice) with light 
movement of 83 total loads reported (40 loads of choice cuts, 24 loads of 
select cuts, 5 load of trimmings, 13 loads of ground beef). 

   FEEDER CATTLE: 

   Weakness continues to develop through feeder cattle trade with front month 
September futures now falling to $2 per cwt lower for the day. The lack of 
underlying support in both live cattle futures as well as softness in beef 
market fundamentals has been unable to draw any significant interest back into 
the market. Typically a strong move lower in corn markets such as seen Tuesday 
would spark additional feeder cattle support. But even lower feed prices are no 
help to the cattle complex Tuesday morning.    

   LEAN HOGS:

   Firm gains have developed through the morning Tuesday with traders focusing 
on the ability to draw additional volume from the recent market surge seen over 
the past week. The lack of support in fundamental support as well as light 
trade volume has limited price movement late morning and moved prices back to a 
narrowly mixed range. The lack of support in cattle futures is starting to 
weigh on the entire market. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $1.07 per cwt to 
$58.90 per cwt with the range from $58.50 to $61.00 per cwt on 3,480 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 262 loads selling with prices falling $0.28 per cwt. Lean hog index 
for 8/26 is at $66.61 down 0.29 with a projected two-day index of $66.34 down 
0.27.

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


(CZ)

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