DTN Livestock Midday: Hog Futures Continue Lower

Photo: Soybean Checkoff

Active pressure quickly moved into hog and feeder cattle trade through the morning with increased underlying pressure sparking widespread liquidation. Live cattle futures remain lightly traded, but mixed in a narrow to moderate range.

General Comments

Triple-digit losses have swept through hog trade, adding to the already weak market structure seen last week. Nearby hog futures are posting $2 per cwt losses at midday with technical weakness developing through the entire complex.

Corn futures are higher in light trade. July corn futures are 4 cents higher. Stock markets are mixed in light trade. Dow Jones is 40 points higher with NASDAQ down 4 points.

LIVE CATTLE:

Mixed trade is seen through the entire live cattle complex with nearby gains offsetting limited follow through pressure in deferred contracts. Gains during the morning in June and August futures has helped to bring a sense of stability to the market despite strong pressure in feeder cattle and hog trade. This could limit further losses during the end of the session, even though prices remain generally weak.

Cash cattle trade remains undeveloped with bids and asking prices unavailable. Show list distribution and inventory taking is the main focus across the entire market Monday, with additional packer interest likely over the next couple of days.

Boxed Beef cut-outs at midday are higher, $0.79 higher (select) and up $0.27 per cwt (choice) with light movement of 50 total loads reported (33 loads of choice cuts, 10 loads of select cuts, no loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Underlying pressure continues to hold in feeder cattle trade with initial weakness Monday morning gaining momentum as the session continues. This is adding increased pressure to the complex with futures $1.30 to $1.90 per cwt lower at midday.

Despite the limited moves in corn prices and mixed live cattle trade, renewed bearishness is seen in feeder cattle futures as prices have broken through May lows, once again establishing new contract lows in nearby contracts. This is likely to further weaken feeder cattle trade through the near future, as traders focus on prices below $132 per cwt.

LEAN HOGS:

Active pressure continues to develop through lean hog futures trade with losses of $2 per cwt in nearby contracts. The underlying weakness seen through the entire complex as technical pressure continues to develop and prices erode is adding to commercial liquidation across the complex.

Expanded limits are available Monday following Friday’s limit losses, but at this point losses have been limited to $2 per cwt in most contracts months.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.53 at $72.32 per cwt with the range from $64 to $75 on 4,118 head reported sold.

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

Pork values firmed following sharp gains in rib and belly cuts. Pork cutouts added $0.73 per cwt at $77.46 per cwt with 123 loads traded. Lean hog index for 6/20 is $79.14, down 0.41, with a projected two-day index is unreported due to delays.

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