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DTN Midday Livestock Comments          08/23 11:55

   Livestock Futures Shift Lower Midweek

   Cattle futures push lower Wednesday as traders back away from previous 
triple digit gains. Continued follow through liquidation is developing through 
the entire lean hog futures complex. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Firm pressure has continued to develop through the livestock market with 
firm pressure seen in both live cattle and lean hog futures trade. This lack of 
support in nearby and deferred futures trade has focused on a combination of 
technical and fundamental pressure. Corn prices are lower in light trade. 
September corn futures are 2 cents lower. Stock markets are lower in light 
trade. The Dow Jones is 51 points lower while Nasdaq is down 17 points.

   LIVE CATTLE:

   Live cattle futures are holding moderate to firm pressure at midday with 
traders are looking for increased softness seen in the October contracts. The 
lack of support in the complex continues to be based on underlying pressure in 
beef values as well as the concerns that long term selling pressure may 
continue surrounding supply pressure if bearish cattle on feed report numbers 
are seen at the end of the week. Cash cattle activity remains slow to develop 
Wednesday with feedlot bids seen at $106 to $107 live basis and $170 to $173 
dressed basis. There still continues to be a wide gap between asking prices and 
bids, which may limit active trade from developing until later in the week. The 
Fed Cattle Exchange Auction report today listed a total of 1,067 head, with 0 
actually sold, 731 head listed as unsold, and 336 listed as PO. The state by 
state breakdown looks like this: KS 271 total head, with 0 head sold, 141 head 
unsold, 130 head listed as PO ($107.25); NE no cattle offered this week; TX 427 
total head, with 0 head sold, 221 head unsold, and 206 head listed as PO 
($107.00); CO 176 total head, with 0 head sold, 176 head unsold, and 0 head 
listed as PO; IA 193 total head, with 0 head sold, 193 head unsold, and 0, head 
listed as PO; other states no cattle offered this week. Beef cut-outs at midday 
are lower, $1.45 lower (select) and down $0.12 per cwt (choice) with moderate 
movement of 96 total loads reported (59 loads of choice cuts, 26 loads of 
select cuts, no loads of trimmings, 11 loads of ground beef). 

   FEEDER CATTLE:

   Narrow losses in nearby feeder cattle futures are holding at midday in 
feeder cattle futures after mixed price levels have held through much of the 
morning. The lack of active trade activity in the feeder cattle market seems to 
be focusing on the potential for market stability midweek and traders looking 
for additional direction. Strong pressure in deferred futures is still creating 
some underlying concern for the entire cattle market as well as overall feeder 
cattle market although traders look for increased direction later in the week 
from the cattle on feed report that will be seen Friday afternoon. 

   LEAN HOGS:

   Strong pressure continues to be seen across lean hog futures trade with 
nearby contracts holding losses nearing $1 per cwt at midday. The overall lack 
of support in the complex is focusing not only on the technical pressure across 
the market, but also the weakness in the cash trade. Even though prices have 
held lower prices, the stability through the morning is showing very little 
activity in the complex, indicating that actual trade in the market may be 
limited, and could keep volume sluggish midweek. Cash prices are lower on the 
National Direct morning cash hog report. The weighted average price fell $1.60 
at $68.99 per cwt with the range from $66.00 to $71.00 on 3,608 head reported 
sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog 
report. The weighted average price fell $0.94 at $69.92 per cwt with the range 
from $66.00 to $71.00 on 630 head reported sold. The National Pork Plant Report 
reported 204 loads selling with prices falling $0.51 per cwt. Lean hog index 
for 8/21 is at $81.53 down $0.82 with a projected two-day index of $82.49, down 
$1.04. 

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


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