DTN Midday Livestock Comments 06/24 12:07
Hog Futures Continue Lower
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
By Rick Kment
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.
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).
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.
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.
Rick Kment can be reached at email@example.com
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