DTN Midday Livestock Comments 08/01 12:00
Triple-Digit Losses Swamp Cattle Pits at Midday
Live and feeder contracts are sharply lower near the noon hour, pressured by
long liquidation and oblivious-to-near-steady feedlot sales. The lean hog it is
mixed in late-morning business as nearby contracts lose ground to deferreds.
By John Harrington
Light trade volume is evident in several areas of cattle feeding country at
midday. Dressed prices in parts of the North are near steady at $258. Live
sales in Kansas have been reported at $163, steady/firm with last week's
weighted average (though some lower from top sales late last Friday. Trade
volume should slowly increase through the day, though it remains to be seen
whether or not short-bought packers will be required to move closer to higher
asking prices. According to the midday report, the national hog base is 2.25
lower compared with the Prior Day settlement ($111.00-120.00, weighted average
$117.74). The corn trade is 1-3 cents lower at midday, pressured by foreign
demand worries and the lack of serious threats to new-crop size.
Off 77 to 160. Live contracts gapped lower on the opening as nervous traders
continue to anticipate discouraging news around the theoretical corner.
Currently, nearby issues have bounced a good deal off session lows, cheered
somewhat by steady packer spending in parts of feeding country. Nevertheless,
pit traders continue to defend extraordinarily large discounts. At this time,
spot August is trading about $6 under live sales in Kansas and Nebraska. Beef
cut-outs are mixed at midday, up 0.11 (choice, $263.77) to off $1.89 (select,
$258.71) with very light box movement (31 loads of choice cuts, 12 loads of
select cuts, four loads of trimmings, nine loads of coarse grinds).
Off 67 to 182. Long liquidation is driving prices lower here as well with
spot August more than $4 below the last cash index calculated by the CME.
Clearly, the feeder board seems ready to end the week in great contrast to the
bullish action seen Monday through Wednesday.
Mixed, up 45 to off 75. Nearby futures are just modestly lower near midday,
lightly pressured by bear spreading strategies. Deferred contracts are
moderately higher, supported by late-week profit taking and technical buying
prompted by oversold charts. Carcass value is sharply lower at midday with all
primals except the ham reflecting softer demand. Pork cut-out: $126.98, off
$2.05. CME cash lean 07/30: 126.83, off 1.01 (DTN Projected lean index for
07/31: 125.82, off 1.01).
John Harrington can be reached at email@example.com
Follow John Harrington on Twitter @feelofthemarket
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