DTN Livestock Midday: Cattle Gains Continue

Photo: Adam Russell, Texas A&M AgriLife Extension Service

Active support has continued to move into live cattle trade Thursday morning with increased underlying support adding confidence to commercial buyers.

General Comments

Very little changed in fundamental or technical market trends have allowed traders to focus on recent market direction. This has sparked increased active support in live cattle trade midday Thursday. Continued pressure is seen in lean hog trade with traders focusing on bearish fundamental weakness still developing.

Corn futures are steady to higher in light morning trade. September corn futures are 1/2 cent higher. Stock markets are mixed in light trade. Dow Jones is 38 points higher with NASDAQ down 40 points.

LIVE CATTLE:

Firm gains have moved back into live cattle trade with lightly traded August futures leading the surge higher, holding a $2 per cwt gain at midday. Although there is limited widespread interest will be seen following the triple-digit gains in August futures, this is helping to spark some spill over buying into all contracts.

October futures are holding 67 cent gains at midday. This is solidifying commercial trade interest as traders focus on steady but firm growth potential over the next couple of days. Prices are still nearly $7 per cwt below levels before markets imploded nearly two weeks ago, creating consistent continued market support still uncertain.

Cash market trade is still undeveloped Thursday morning, although bids are becoming more evident. Bids are seen at $105 in the South and $172 to $175 dressed in the North. This could help to stimulate additional trade interest, but most likely trade will be delayed until Friday.

Boxed Beef cut-outs at midday are mixed, $2.38 higher (select) and down $2.39 (choice) with light movement of 49 total loads reported (29 loads of choice cuts, 14 loads of select cuts, no loads of trimmings, 6 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures remain mixed in limited activity with nearby futures supported by moderate to strong gains in live cattle trade. August through October contracts continue to hold 10 to 70 cent gains, based on the stability in grain markets and potential for additional spillover support through the entire complex.

The potential to add steady but firm commercial interest redeveloping through the end of the month may create a strong underlying base on which traders can build in the near future.

LEAN HOGS:

Sharp losses have continued to develop through the entire lean hog complex Thursday morning following the midweek reversal seen through the complex late Wednesday. Although prices have continued to hold above long term support levels seen last week, the concern that additional market weakness will be able to shatter any sense of market support that has developed is causing any buyers to remain nervous.

The looming uncertainty surrounding any trade deal or business with China continues to create questions if domestic demand will be able to keep up with the aggressive pace that plants continue to keep during the late summer months.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.91 at $66.63 per cwt with the range from $57 to $71.50 on 7,688 head reported sold.

Pork values shifted lower following firm pressure in most primal cuts. Pork cutouts fell $1.13 per cwt at $80.11 per cwt with 226 loads traded. Lean hog index for 8/17 is $77.40, down 0.59, with a projected two-day index unavailable at this time.

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