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DTN Midday Livestock Comments          07/13 11:54

   Cattle Trade Slips Lower Late Friday   

   Light to moderate pressure is developing in live cattle and feeder cattle 
futures. This is creating some longer-term uncertainty if firm buying will 
return to the complex next week.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Firm pressure has developed in cattle trade due to limited trade volume and 
traders focusing on backing away from the market gains which developed 
Thursday. The yo-yo style of market shifts seen through the second half of the 
week is creating some additional volatility for live cattle and feeder cattle 
markets. Hog futures have firmed with the majority of interest seen in deferred 
contract months. Corn prices are lower in light trade Friday. July corn futures 
are 4 cents lower. Stock markets are higher in light trade. The Dow Jones is 88 
points higher while Nasdaq is up 6 points.

   LIVE CATTLE:

   Losses are starting to develop through live cattle trade midday Friday, as 
early morning market stability seems to be more uncertain. The pullback in live 
cattle futures has created some underlying market pressure in live cattle 
futures with August futures leading the market lower with an 80 cent per cwt 
loss. This overall pressure is not expected to create widespread market changes 
in the complex, but with traders pulling back from early-week gains, the 
softness in futures trade is likely to affect market fundamentals in the coming 
weeks. Cash cattle trade appears to be an afternoon affair Friday with sluggish 
bid activity redeveloping through the morning Friday. Live bids are seen at 
$108 per cwt while dressed bids in the North are posted at $170 to $175 per 
cwt. Asking prices are generally holding firm at $114 to $115 live, and $182 
dressed. But this still leaves a wide gap between asking prices and bids before 
the end of the day. Boxed Beef cut-outs at midday are lower, $0.41 lower 
(select) and down $1.86 per cwt (choice) with light movement of 45 total loads 
reported (23 loads of choice cuts, 16 loads of select cuts, no loads of 
trimmings, 6 loads of ground beef). 

   FEEDER CATTLE:

   Moderate late-week losses have developed in feeder cattle trade as traders 
seem to be less focused about long term market direction, than trying to adjust 
positions at the end of the week. The firm gains seen Thursday has helped to 
bring some needed stability to the market following midweek losses. Traders 
seem willing to hover in a moderate range following the volatility seen over 
the last couple of sessions. Prices were mixed early Friday morning, but have 
settled in a moderately lower trading range with prices 40 to 50 cents lower in 
most contract months. This is not expected to change the overall direction of 
the market, but more focused on trade adjustments Friday. 

   LEAN HOGS:

   Strong gains have redeveloped Friday with deferred contracts posting strong 
triple digit market moves during the first few hours of trade. The aggressive 
technical pressure seen during the last couple of weeks has allowed traders to 
take advantage of the oversold status of the market and re-own positions before 
the end of the week. July futures remain lightly traded and unchanged at 
midday, while most of the focus in August futures is holding moderate gains as 
traders still remain concerned with current fundamental situations. Cash prices 
are lower on the National Direct morning cash hog report. The weighted average 
price is down $0.71 at $74.34 per cwt with the range from $67.00 to $74.66 on 
3,745 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price is down $0.81 at $72.72 per 
cwt with the range from $67.00 to $73.50 on 610 head reported sold. The 
National Pork Plant Report posted 163 loads selling with carcass values gaining 
$1.13 per cwt. Lean hog index for 7/11 is at $81.26 down 0.26 with a projected 
two-day index of $80.91, down 0.35.

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


(SK)

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