DTN Midday Livestock Comments 06/29 11:53

DTN Midday Livestock Comments 06/29 11:53 Corn Market Weakness Draws Support to Feeder Cattle Futures Feeder cattle futures have made an impressive surge higher during morning trade Wednesday. This has helped to draw additional support to the entire cattle complex as nearby contracts are holding triple-digit gains. Hog futures remain mostly lower in narrow trading ranges as fundamental concerns are once again taking over the market. By Rick Kment DTN Analyst GENERAL COMMENTS: Strong triple-digit gains in feeder cattle futures are setting the tone of strong market support through the midweek session. August feeder cattle futures continue to hold $2.65 per cwt gains as traders focus on weaker grain markets and potential follow-through commercial support stepping into cattle futures at the end of the week. Lean hog futures are eroding, following support early in the week, even though trade volume remains sluggish. Corn prices are lower. July corn futures are 7 cents lower. Stock markets are higher in light trade. The Dow Jones is 231 points higher while Nasdaq is up 79 points. LIVE CATTLE: Strong gains have developed through the morning, posting $1 gains in June and August contracts while support between 40 and 80 cents per cwt is seen through the rest of the complex. Additional market activity may continue to develop as traders continue to be focused on the aggressive moves developing in feeder cattle markets. The ability to keep prices well supported each day this week is bringing additional confidence that recent support will hold. Although to this point overall open interest has not seen a significant jump, indicating that traders still remain extremely cautious. Cash cattle markets are starting to show some life with a few initial token bids developing in Texas at $113 per cwt. This would be $3 to $4 per cwt lower than last week's trade, but at this point it is unlikely that feedlot managers would be willing to settle for anything less than steady. Asking prices continue to be seen near $120 per cwt in the South and $190 and higher in the North. It still may be Thursday or Friday before active trade develops, although both sides are not expected to allow trade to go into late Friday because of the upcoming holiday weekend. Beef cut-outs at midday are mixed $0.29 lower (select) and up $1.34 per cwt (choice) with active movement of 108 total loads reported (58 loads of choice cuts, 21 loads of select cuts, 10 loads of trimmings, 19 loads of ground beef). FEEDER CATTLE: Aggressive triple-digit gains held through the morning across nearby feeder cattle futures as traders are focusing on the light to moderate pullback in grain markets. These lower prices reduce overall feed costs and production costs of cattle on feed, allowing for higher initial prices paid for young feeder cattle. August futures are leading the move higher with a $2.65 per cwt rally. The support has been firm through the morning with prices moving very little in the last half of the morning. At this point gains are expected to hold through the end of the session, likely sparking additional support through the end of the week. LEAN HOGS: The strong market support seen early in the week is once again under fire as initial gains Wednesday morning have turned into narrow losses as the trading session has continued. Concerns that even more pressure in cash hog markets and pork values will develop in the waning days of June has created another market pullback by most traders who are still in the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.21 per cwt to $78.83 per cwt with the range from $72.00 to $80.00 per cwt on 2,681 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 207 loads selling with prices falling $2.28 per cwt. Lean hog index for 6/27 is at $84.86, up 0.25 with a projected two-day index of $85.03 up 0.17. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.