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DTN Midday Livestock Comments          06/20 12:02

   Firm Pressure Continues Thursday 

   Active losses have moved through feeder cattle trade Thursday morning in 
reaction to continued price support across corn markets. Hog futures have 
quickly pulled back from midweek gains, with firm to active losses.

By Rick Kment
DTN Analyst

General Comments

   Firm pressure in all livestock trade has sparked renewed weakness Thursday 
morning. Feeder cattle trade has led the market lower, focusing on increased 
grain prices and continued concerns of production losses due to wet weather and 
late planting. Corn futures are higher in moderate trade. July corn futures are 
6 3/4 cents higher. Stock markets are higher in light trade. Dow Jones is 123 
points higher with NASDAQ up 31 points. 

   LIVE CATTLE:

   Live cattle trade continues to erode through the morning as light to 
moderate pressure is seen in all live cattle trade once additional volume moved 
into the market and initial short covering subsided. August futures are 45 
cents lower with pressure developing from lack of strong support expected in 
beef values and sharp triple-digit losses in feeder cattle creating increased 
market weakness across the complex. Even though prices have shifted lower 
through the morning, the market is expected to remain in the current sideways 
trend over the near future. Cash cattle started to develop in the South with 
live prices of $110 per cwt seen. This is $2 per cwt lower than last week, and 
could be enough trade to set the trend for the week. Activity in the North 
remains quiet with no bids on the table at this point. Asking prices remain 
firm at $112 to $115 live and $185 and higher dressed. Boxed Beef cut-outs at 
midday are higher, $0.23 higher (select) and up $0.27 per cwt (choice) with 
light movement of 45 total loads reported (24 loads of choice cuts, 12 loads of 
select cuts, no loads of trimmings, 9 loads of ground beef).

   FEEDER CATTLE:

   Active pressure is moving into feeder cattle trade Thursday following new 
gains in corn trade. The strong underlying support in grain prices based on 
weather conditions and expected reduced production sparked triple-digit losses 
in all feeder cattle futures. Although futures have pulled back from session 
lows, markets still remain $1.40 to $1.60 per cwt lower based on expected feed 
cost increases as well as firming pressure in live cattle trade.

   LEAN HOGS: 

   Firm pressure is quickly moving into lean hog trade Thursday morning with 
increased focus on widespread market pressure in all livestock trade. July 
futures are leading the complex lower with a $1.37 per cwt loss at midday, as 
traders quickly back away from midweek support. Renewed buyer support in grain 
markets is limiting overall support, while traders are also pulling back from 
recent support following no additional sales to China on the export sales 
report. The fact that China exports remain hit-or-miss is not shocking to the 
market. Given the country's need for pork, it makes it even more evident of its 
efforts not to buy pork from the U.S. Hopes of upcoming trade talks seem to 
have eased for now, but this will likely limit additional price pressure in the 
next week. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price is down $1.47 at $74.93 per cwt with the 
range from $67 to $76 on 4,776 head reported sold. Cash prices are unreported 
due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. 
Pork values bounced higher despite sharp losses in picnic cuts. Pork cutouts 
added $0.83 per cwt at $78.52 per cwt with 153 loads traded. Lean hog index for 
6/17 is $79.26, down 0.01, with a projected two-day index is $79.49, up 0.23.

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


(BAS)

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