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DTN Livestock Midday: Strong Feeder Cattle Futures Redevelop

Mike Christensen
By John Harrington, DTN Analyst June 10, 2014

Aggressive gains have redeveloped in feeder cattle futures with most nearby contracts nearing gains of $2 per cwt. Lack of direction is seen through the lean hog markets with prices essentially erasing moves seen in Monday’s session during morning trade.



Cattle futures have regained buyer support following aggressive triple-digit gains redeveloping in feeder cattle futures. Live cattle futures are holding light to moderate gains in most nearby contracts, although little additional direction is seen Tuesday morning. Corn futures are lower at midday. July corn futures are 5 cent per bushel lower. Stock markets are lower in light trade. The Dow Jones is 16 points lower while Nasdaq is down 10 points.


Moderate price gains are holding across live cattle future with gains of 20 to 30 cents per cwt seen in most nearby contract months. June futures are holding strong gains of 57 cents per cwt, but the lack of additional trade volume could allow these markets to remain in a narrow to moderate range over the near future. Cash cattle markets remain quiet and are expected to stay that way later in the week. The only bids developing at this point are a few bids of $142 per cwt in Kansas. It is uncertain if any other bids will be seen until midweek. Asking prices remain at $147 and higher in the South and $235 and higher in the North. Beef cut-outs at midday are higher, $1.00 per cwt higher (select) and up $0.88 per cwt (choice) with active movement of 110 total loads reported (48 loads of choice cuts, 44 loads of select cuts, one load of trimmings, 17 loads of ground beef).


Following lackluster activity through the first couple hours of trade, strong buyer support has redeveloped in the feeder cattle futures. Triple-digit gains are seen across the entire futures market with traders looking for additional outside market support as well as follow-through buying in live cattle markets that would help to sustain additional buyer interest in the complex. It is uncertain just how much additional volume will develop through the rest of the complex, but the firmness seen at midday may help to sustain current support.


Trade activity across the lean hog market has been choppy through the morning, with moderate to strong buyer support seen in front month June futures. Other nearby contracts have narrowed the mixed trading range seen during the morning, but still remain essentially directionless through midmorning. July and August futures are well off of session lows with prices holding 22 to 27 cent per cwt losses. Cash prices are lower on the National Direct morning cash hog report. The weighted average price lost $1.69 per cwt to $108.46 per cwt with the range from $101.00 to $111.50 per cwt on 289 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report is reported 153 loads selling as prices falling $0.74 per cwt. Lean hog index for 6/6 is at $111.23 up 0.25, with a projected two-day index of $111.54 up 0.31.


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Mike Christensen
By John Harrington, DTN Analyst June 10, 2014