DTN Livestock Midday: Limited Volume Leaves Prices Mixed

Early market swings have been moderated through the Friday trading session due to limited volume redeveloping across the complex. This is keeping prices in a narrow to moderate range in cattle and hog futures.

GENERAL COMMENTS:

Mixed trade has developed midday despite the strong market shifts which developed early in the session. Live cattle futures are mixed in a narrow range with firm pressure still developing in deferred contracts. Hog markets are also mixed as nearby futures have pulled back from strong $2 per cwt gains, following limited activity moving back into the complex.

Corn markets are lower in light trade activity. September corn futures are 8 cents lower. Stock markets are lower in light trade. The Dow Jones is 183 points lower while Nasdaq is down 30 points.

LIVE CATTLE:

Nearby live cattle futures are mixed in a very narrow trading range following firm losses early in the session. The overall tone of the market remains weak following sharp losses on Thursday.

Strong market pressure sweeping through the grain and stock markets is limiting overall trade activity in cattle futures. But limited direction is likely to be seen before the end of the day Friday. This will give traders a little more time to assess longer-term market direction, as firm overall demand is still expected to be seen through the upcoming weeks and months.

Limited trade has redeveloped in Nebraska and Colorado with live prices at $111 per cwt. The rest of the market remains sluggish with bids redeveloping at $110 live basis and $174 dressed. Asking prices on cattle still on show lists remain at $115 and higher live basis, and $180 dressed. It is expected that most of the trade in the North is done, although activity is still expected to develop through the end of the day in the South.

Boxed Beef cut-outs at midday are higher, $0.28 higher (select) and up $0.24 per cwt (choice) with light movement of 44 total loads reported (30 loads of choice cuts, 8 loads of select cuts, zero loads of trimmings, 6 loads of ground beef).

FEEDER CATTLE:

Feeder cattle prices have wandered in a moderate but mixed trading range through the morning. Nearby contracts are trading steady to 50 cents per cwt higher at midday, while light to moderate losses of 10 to 55 cents per cwt are seen in deferred contracts. There remains very limited trade volume through the Friday session, which is likely to add some additional market shifts as traders try to adjust positions at the end of the trading session.

The sharp losses in grain trade following the USDA supply and demand report is likely to help draw some underlying support to cattle markets. But this interest may still be quiet until next week as limited volume is expected through the rest of the session Friday.

LEAN HOGS:

Strong early support in lean hog trade has quickly eroded late morning with nearby contracts now holding narrow losses. Firm gains are still holding across deferred contracts, although the overall tone of the market remains focused on the ability to sustain the market rally that developed Thursday.

There is likely to be some additional end-of-week market positioning done over the last couple hours of trade Friday. But the real test of market direction will be seen early next week. This will indicate if buyers will continue to move back into the market and help to establish a firmer market trend, or if traders will return to the bearish market direction seen over the past month.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.05 at $44.88 per cwt with the range from $44.00 to $46.00 on 3,836 head reported sold.

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

The National Pork Plant Report posted a total of 160 loads selling with cutout values slipping 0.38 per cwt at $73.11 per cwt in the morning report. Lean hog index for 8/8 is at $61.88 down 1.29 with a projected two-day index of $60.04, down 1.84.

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