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DTN Livestock Midday: Strong Gains Quickly Sweep Through Cattle

Ernst Undesser
By Rick Kment DTN Analyst July 14, 2017

DTN Livestock Midday: Strong Gains Quickly Sweep Through Cattle

©Debra L Ferguson Stock Photography

Gains redevelop in cattle markets midday Friday as buyer support has quickly been rekindled. This has pushed feeder cattle futures to triple-digit gains allowing buyer support to move back into the complex. Hog markets remain sharply lower with end-of-week pressure based on light trade volume.

GENERAL COMMENTS:

Strong market shifts higher in the cattle market has helped to draw buyer support back into the complex. This has pushed feeder cattle gains to triple-digit gains with live cattle markets pushing gains to 50 to 90 cents per cwt. Firm losses continue to hold in hog markets based on overall lack of activity.

Corn prices are higher in light trade. July corn futures are 8 cents higher. Stock markets are higher in light trade. The Dow Jones is 43 points higher while Nasdaq is up 26 points.

LIVE CATTLE:

Live cattle futures have quickly moved from a narrowly mixed market range to firm gains midday Friday based on strong triple-digit gains that flooded the feeder cattle complex. This helped to draw buyer support back into the complex and push nearby gains from 50 to 90 cents per cwt at midday. The lack of selling pressure and focus on end of the week positioning is the main focus of trade activity during late day moves.

Cash cattle markets are quiet Friday morning following light to moderate trade Thursday which was seen at $190 dressed basis and $120 live basis. It is expected that packers and feeders will be done for the week, and willing to hold out until next week as they look for additional direction in futures markets as well as outside market shifts.

Beef cut-outs at midday are lower, $1.86 lower (select) and down $0.60 per cwt (choice) with moderate movement of 85 total loads reported (51 loads of choice cuts, 21 loads of select cuts, 1 load of trimmings, 11 loads of ground beef).

Feeder Cattle:

Moderate buyer support has quickly moved back into the feeder cattle futures complex midday Friday. This is breaking away from the mixed price levels seen across the complex and trade inactivity seen during most of the morning.

Triple-digit gains have now developed, based more on lack of seller interest in late morning. This could help to spark some increased strong end-of-week support through the entire cattle market through the week, although the volatility that this may lead to could bring some uncertainty early next week.

LEAN HOGS:

Strong market pressure has developed across the lean hog futures complex with traders focusing on overall end of the week pressure in all lean hog futures markets as well as underlying softness in cash trade which is creating uncertainty in the market. This is most evident in August and October contracts, holding triple digit losses during morning trade.

Trade volume has been extremely light through most of the morning, which is expected to limit additional price direction, but this could bring about additional market activity early next week.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.54 at $86.26 per cwt with the range from $81.00 to $87.50 on 4,664 head reported sold.

Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.43 at $87.33 per cwt with the range from $82.00 to $87.50 on 2,085 head reported sold.

The National Pork Plant Report reported 128 loads selling with prices adding $1.20 per cwt. Lean hog index for 7/12 is at $92.84 up $0.09 with a projected two-day index of $92.78, down $0.06.

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Ernst Undesser
By Rick Kment DTN Analyst July 14, 2017