DTN Livestock Midday: Cattle Trade Slips

Light to moderate pressure is developing in live cattle and feeder cattle futures. This is creating some longer-term uncertainty if firm buying will return to the complex next week.

GENERAL COMMENTS:

Firm pressure has developed in cattle trade due to limited trade volume and traders focusing on backing away from the market gains which developed Thursday. The yo-yo style of market shifts seen through the second half of the week is creating some additional volatility for live cattle and feeder cattle markets. Hog futures have firmed with the majority of interest seen in deferred contract months.

Corn prices are lower in light trade Friday. July corn futures are 4 cents lower. Stock markets are higher in light trade. The Dow Jones is 88 points higher while Nasdaq is up 6 points.

LIVE CATTLE:

Losses are starting to develop through live cattle trade midday Friday, as early morning market stability seems to be more uncertain. The pullback in live cattle futures has created some underlying market pressure in live cattle futures with August futures leading the market lower with an 80 cent per cwt loss.

This overall pressure is not expected to create widespread market changes in the complex, but with traders pulling back from early-week gains, the softness in futures trade is likely to affect market fundamentals in the coming weeks.

Cash cattle trade appears to be an afternoon affair Friday with sluggish bid activity redeveloping through the morning Friday. Live bids are seen at $108 per cwt while dressed bids in the North are posted at $170 to $175 per cwt. Asking prices are generally holding firm at $114 to $115 live, and $182 dressed. But this still leaves a wide gap between asking prices and bids before the end of the day.

Boxed Beef cut-outs at midday are lower, $0.41 lower (select) and down $1.86 per cwt (choice) with light movement of 45 total loads reported (23 loads of choice cuts, 16 loads of select cuts, no loads of trimmings, 6 loads of ground beef).

FEEDER CATTLE:

Moderate late-week losses have developed in feeder cattle trade as traders seem to be less focused about long term market direction, than trying to adjust positions at the end of the week. The firm gains seen Thursday has helped to bring some needed stability to the market following midweek losses. Traders seem willing to hover in a moderate range following the volatility seen over the last couple of sessions.

Prices were mixed early Friday morning, but have settled in a moderately lower trading range with prices 40 to 50 cents lower in most contract months. This is not expected to change the overall direction of the market, but more focused on trade adjustments Friday.

LEAN HOGS:

Strong gains have redeveloped Friday with deferred contracts posting strong triple digit market moves during the first few hours of trade. The aggressive technical pressure seen during the last couple of weeks has allowed traders to take advantage of the oversold status of the market and re-own positions before the end of the week.

July futures remain lightly traded and unchanged at midday, while most of the focus in August futures is holding moderate gains as traders still remain concerned with current fundamental situations.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.71 at $74.34 per cwt with the range from $67.00 to $74.66 on 3,745 head reported sold.

Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.81 at $72.72 per cwt with the range from $67.00 to $73.50 on 610 head reported sold.

The National Pork Plant Report posted 163 loads selling with carcass values gaining $1.13 per cwt. Lean hog index for 7/11 is at $81.26 down 0.26 with a projected two-day index of $80.91, down 0.35.

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