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DTN Midday Livestock Comments          07/27 12:12

   Moderate Pressure Sweeps Through Cattle Trade Midday Thursday

   Live cattle futures have pulled back from the support seen early Thursday 
morning. This lack of follow-through support is focused on overall market 
uncertainty through the complex with traders focusing on fundamental market 
weakness. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Firm pressure has developed in live cattle and lean hog futures midday 
Thursday even though light trade volume has been seen through the complex. Very 
little long-term market direction is expected to be seen over the near future 
which could allow prices to shift in a moderate range over the next few trading 
sessions. Corn prices are higher in light trade. September corn futures are 3 
cents higher. Stock markets are higher in light trade. The Dow Jones is 51 
points higher while Nasdaq is up 4 points.

   LIVE CATTLE:

   Light pressure has developed in live cattle futures with nearby futures 
holding losses of 12 to 65 cents per cwt at midday although trade volume has 
remained extremely light through the entire session. The inability to hold 
early buyer support as more trade activity moved into the complex quickly gave 
evidence that additional losses may continue to develop through the entire 
market. But as seen midweek, a strong late day market bounce is still not out 
of the question as the light trade volume is giving the opportunity to allow 
increased volatility into all markets. Cash cattle markets are generally quiet 
Thursday morning with bids redeveloping at $117 live basis and $186 to $188 
dressed. Sales have not been reported at this point, and may be hard to find 
before the end of the week. It is likely that the market has been set at this 
point. Beef cut-outs at midday are lower, $0.64 lower (select) and down $0.26 
per cwt (choice) with light movement of 87 total loads reported (47 loads of 
choice cuts, 29 loads of select cuts, 3 loads of trimmings, 7 loads of ground 
beef). 

   Feeder Cattle:

   Narrowly mixed trade is seen across the feeder cattle market with traders 
taking a very subdued approach Thursday morning. The overall lack of direction 
seen through the entire trading session continues to draw front-month August 
futures slightly lower with August futures holding a 35 cent loss. Other nearby 
contracts have posted narrow gains with spillover buyer interest trickling into 
the complex through the last half of the week.     

   LEAN HOGS:

   The lack of support seen through the entire complex has continued to develop 
Thursday morning with nearby contracts expanding early losses as October 
futures are now trading 62 cents per cwt lower in light trade. Market activity 
continues to remain sluggish across all contracts, with prices grouped in a 
narrow range, but firmly lower as most contracts 30 to 60 cents per cwt lower 
at midday. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price fell $0.80 at $80.95 per cwt with the range 
from $80.28 to $82.50 on 3,810 head reported sold. Cash prices are unreported 
due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. 
The National Pork Plant Report reported 180 loads selling with prices falling 
$1.19 per cwt. Lean hog index for 7/24 is at $90.44 down $0.69 with a projected 
two-day index of $89.84, down $0.60.   

   Rick Kment can be reached at rick.kment@dtn.com 


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