DTN Midday Livestock Comments 07/06 12:08

DTN Midday Livestock Comments 07/06 12:08 Feeder Cattle Futures Rally on Corn Losses Cattle futures have bounce higher and lower through the morning with feeder cattle futures being firmly supported at midday by the losses in corn futures. Lean hog and live cattle futures remain under pressure as outside market softness and fundamental concerns are limiting any buyer support. By Rick Kment DTN Analyst GENERAL COMMENTS: Pressure is holding across live cattle and lean hog futures markets as traders are focused on the pressure in outside markets midweek. The softness in grain markets has brought about a fresh round of buyer support to feeder cattle futures, although it is uncertain just how much additional momentum can be seen. Corn prices are lower. July corn futures are 9 cents lower. Stock markets are higher in light trade. The Dow Jones is 38 points higher while Nasdaq is up 27 points. LIVE CATTLE: Moderate pressure is holding across live cattle futures at midday with losses seen from 65 to 80 cents per cwt. The strong support seen in feeder cattle futures and bounce higher in beef values is not enough to overcome the widespread outside market losses, and concern that long-term buyer support may be hard to be sustained across the live cattle futures complex. Trade is expected to remain extremely sluggish through most of the day, but losses may continue to hold based on lack of additional market news entering the market. Cash cattle markets still remain quiet with bids undeveloped at this point. It may be Thursday of Friday before active interest is even shown, but packers are expected to need to gain access to additional cattle in order to fuel the full week of procurement next week. Asking prices are hard to pin down midweek, but a few cattle are listed around $125 in the South and $202 and higher in the North. Beef cut-outs at midday are higher $2.18 higher (select) and up $0.95 per cwt (choice) with light movement of 93 total loads reported (33 loads of choice cuts, 24 loads of select cuts, 4 loads of trimmings, 32 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have regained most of the losses seen during the morning as price have shifted higher and lower through the early part of the trading session Wednesday. Ultimately the aggressive follow-through pressure in the grain market is creating widespread support in feeder cattle futures, although the lack of support seen in live cattle markets could erode a portion of this buying activity through the end of the session. August feeder cattle contracts are holding a $1.05 per cwt gain with the rest of the complex trading mostly higher as the full range is seen from 32 cents lower to 72 cents higher. LEAN HOGS: Sharp losses are seen through the lean hog futures complex with lack of support in market fundamentals as well as further technical pressure. August futures continue to lead the downhill slide with $2.05 per cwt losses while most other nearby contracts are holding losses of $1 to $2 per cwt. The expectation is that prices will remain in the current trading range through the rest of the session based on lack of volume in the complex, and outside market pressure which is limiting overall buyer interest. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 263 loads selling with prices falling $0.04 per cwt. Lean hog index for 7/1 is at $83.83, down 0.62 with a projected two-day index of $83.24 down 0.59. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.