DTN Livestock Midday: Sharp Gains Sweep Through Cattle Trade

The overall support in cattle markets has taken the entire complex by surprise as live cattle futures have moved from sluggishly traded to strong triple-digit gains during late-morning activity.

GENERAL COMMENTS:

Sharp triple-digit gains have quickly sparked widespread interest through the entire cattle complex. This has pushed front-month live cattle trade to $2.80 per cwt gains, with increased overall support seen in all nearby contract months. Lean hog futures are moderately lower with traders slowly backing away from late-week gains.

Corn prices are mixed in light trade Friday. July corn futures are 1/4 cent lower. Stock markets are mixed in light trade. The Dow Jones is 11 points higher while Nasdaq is down 5 points.

LIVE CATTLE:

Sharp gains have flooded into live cattle futures late-morning Monday. This has pushed front-month August futures to a $2.80 per cwt rally near midday with some traders now looking for the potential to lock trade activity into limit-higher moves through the rest of the session.

The support in the market has been extremely recent, as very limited support was seen through the first hour of trade. Even though no direction shifts have been seen in market fundamentals, the support of renewed technical buyer activity could help to offset pressure seen last week as traders look for firming short-term gains.

This focus could help to drive commercial and investment traders back into the market over the near term, with traders also looking at long-term support based on supply issues expected to be seen in the beef market through the upcoming year.

Cash cattle markets are still undeveloped following light trade seen at the end of last week. Asking prices and bids are still undefined, and likely will remain that way until Tuesday or later. Even though packers are expected to remain short bought, active trade is not expected until the second half of the week.

Boxed Beef cut-outs at midday are mixed, $0.77 Higher (select) and down $0.30 per cwt (choice) with light movement of 55 total loads reported (28 loads of choice cuts, 10 loads of select cuts, 7 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have found additional buyer support late morning Monday with traders trying to chase the live cattle complex higher. The early market losses have quickly been offset by triple-digit gains in nearby contract months. The overall support in the complex continues to spark some increased buyer activity, and push front-month August futures $1.80 per cwt higher.

Overall trade volume remains light, which is creating the concern that recent gains may not be able to hold through the end of the session, but as of now, traders are focused on regaining support in all cattle markets.

LEAN HOGS:

Limited pressure is slowly moving into the lean hog complex with July and August futures holding losses of 20 to 22 cents per cwt with very limited support seen through the entire complex. There is growing uncertainty that additional buyers will be willing to move back into the market, even though prices shifted higher late last week and cash markets are focusing on establishing a sense of stability through the next couple of weeks.

Cash prices are unreported due to confidentiality on the National Direct morning cash hog report.

Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.

The National Pork Plant Report posted 145 loads selling with carcass values falling $0.08 per cwt. Lean hog index for 7/12 is at $80.91 down 0.35 with a projected two-day index of $80.34, down 0.57.

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