DTN Midday Livestock Comments 07/24 12:31
Limit Losses Develop in Cattle Futures
Sharp losses flood through cattle trade as limit losses are seen in live
cattle and feeder cattle futures. The bearish tone of the cattle on feed report
has created additional pressure on the entire complex.
By Rick Kment
Limit losses have developed in cattle trade Monday morning in reaction to
the bearish cattle on feed report seen Friday. This pushed live cattle futures
$3 per cwt lower in several contracts, while most feeder cattle markets are
posting $4.50 per cwt losses. Corn prices are lower in light trade. September
corn futures are 4 cents lower. Stock markets are mixed in light trade. The Dow
Jones is 50 points lower while Nasdaq is up 10 points.
Limit losses are seen in October and December contracts have allowed markets
to create additional market pressure through live cattle futures. There
continues to be a bearish undertone across the entire cattle market as traders
focus on the sharp losses in feeder cattle trade as well as general pressure in
the live cattle complex. This could significantly weaken fundamentals even
though technical factors have not been impacted at this point. Cash cattle
remain quiet with bids and asking prices undefined at this point in the week.
Show lists appear to be overall larger across the country with Texas the only
area with smaller offerings early in the week. It is likely going to be midweek
before active bids develop given the defensiveness of futures trade. Beef
cut-outs at midday are higher, $2.77 higher (select) and up $0.53 per cwt
(choice) with light movement of 41 total loads reported (23 loads of choice
cuts, 10 loads of select cuts, no loads of trimmings, 8 loads of ground beef).
Limit losses have quickly developed across feeder cattle futures as traders
have focused on the bearish news in the July 1 cattle on feed report. The
increased placement numbers seen during June has added to the concerns through
the entire complex. This has weakened the entire cattle market and could set
the tone for the entire week.
Triple-digit losses have moved through nearby lean hog futures trade with
October through April lean hog futures posting losses of $1 to $1.25 per cwt as
spillover pressure is seen from the weakness in the cattle futures. August
futures remain under pressure with prices hovering above $80 per cwt with
95-cent-per-cwt losses. The continued pressure in cash trade continues to add
to the lack of support in the lean hog complex. This may add even more softness
to the market through the near future as traders try to bring some underlying
stability to the market in the next couple of weeks. Cash prices are lower on
the National Direct morning cash hog report. The weighted average price fell
$1.19 at $82.13 per cwt with the range from $77.00 to $83.25 on 4,944 head
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash
hog report. The weighted average price fell $0.71 at $82.86 per cwt with the
range from $77.00 to $83.00 on 2,015 head reported sold. The National Pork
Plant Report reported 101 loads selling with prices falling $0.67 per cwt. Lean
hog index for 7/20 is at $91.67 down $0.33 with a projected two-day index of
$91.13, down $0.54.
Rick Kment can be reached at firstname.lastname@example.org
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