DTN Midday Livestock Comments 07/08 11:51

DTN Midday Livestock Comments 07/08 11:51 Mixed Cattle Trade Looking for End-of-Week Direction Early support that quickly swept through the cattle complex early in the morning has been unsupported through the rest of the morning. There may be additional price shifts through the rest of the complex as overall volume remains light. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle futures are mixed at midday Friday with live cattle contracts holding a narrow trading range as nearby contracts are seen on either side of unchanged. The lack of follow-through support from early gains points to uncertainty in fundamental and technical support at the end of the week. Hog futures continue to shift lower with sharp pressure seen in nearby contracts following additional liquidation developing across the entire complex. Corn prices are higher. July corn futures are 6 cents higher. Stock markets are higher in light trade. The Dow Jones is 196 points higher while Nasdaq is up 66 points. LIVE CATTLE: Strong early gains seen in live cattle futures were quickly dashed as the complex is holding onto narrowly mixed price moves at midday. The trading range is seen from 40 cents lower to 25 cents higher as lack of support in beef values at the end of the week as well as the strong pullback in feeder cattle futures midday is creating additional market pressure. There continues to be growing uncertainty as to just how much fundamental support will be seen in the market at the end of the week. Cash cattle trade is still undeveloped Friday morning with bids seen at $119 to $120 per cwt in the South and $190 to $194 in the North. Packer interest is going to have to increase over the next couple of hours in order to buy cattle for the week although active trade may not develop until the middle of the afternoon or later. Asking prices are still listed around $124 and higher in the South and $200 and higher in the North. Beef cut-outs at midday are lower $0.01 lower (select) and down $0.19 per cwt (choice) with light movement of 53 total loads reported (32 loads of choice cuts, 14 loads of select cuts, no loads of trimmings, 7 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have bounced higher and lower through the morning as early market support has been quickly swept away following the aggressive buyer interest moving into the grain market. Feeder cattle futures have been much more heavily affected by the morning support in corn and soybean markets than any other factor in the complex. This increased focus on production costs and higher feed prices has put nearby contracts 20 to 60 cents per cwt lower with the most significant pressure seen in front month August contracts. Deferred futures continue to hold onto light gains, but the overall lack of volume across the market is limiting the impact of this price support. LEAN HOGS: Additional liquidation continues to be seen through the lean hog futures complex with prices holding firm losses through the morning. Nearby contracts are trading 60 cents to $1 per cwt lower at midday, which is a similar range as seen through the entire morning. Overall trade volume remains extremely light, which in many cases could spark wider price moves, but the activity through the Friday session seems to be limited on continued market pressure with no additional direction seen in either technical of fundamental factors. Traders are desperately looking for bottom to the market, but there is no indication that stability is near. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.40 per cwt to $75.79 per cwt with the range from $76.00 to $77.50 per cwt on 1,778 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 135 loads selling with prices falling $0.04 per cwt. Lean hog index for 7/6 is at $82.91, down 0.33 with a projected two-day index of $82.58 down 0.33. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.