DTN Midday Livestock Comments 07/18 12:17

DTN Midday Livestock Comments 07/18 12:17 Deferred Lean Hog Futures Get Pounded at Midday Lean hog futures are under pressure at midday with triple-digit losses dominating 2017 contracts. At the same time, cattle futures are mostly higher, reversing from early session selling. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle buying activity is typically limited today to the gathering of new showlists. The new offering appears to be generally smaller with only Colorado showing more ready steers and heifers. According to the midday report, the national hog base is $1.43 lower compared with the Prior Day settlement ($65.00-73.00, weighted average $71.15). Corn futures are 2-3 cents higher near the top of the noon hour, bouncing somewhat from early selling. Equities are fractionally higher thanks in part to Bank of America adding to positive earnings momentum. The Dow is 6 points higher with the Nasdaq better by 22. LIVE CATTLE: After opening lower with the help of follow-through selling and disappointing cash news, live contracts have trading moderately higher for the past several hours. Features at midday include short covering, profit taking, and light bull spreading. Beef cut-outs are significantly lower at midday, off 0.48 (select, $191.90) to $1.73 (choice, $202.98) with light box movement (39 loads of choice cuts, 10 loads of select cuts, 6 loads of trimmings, 13 loads of coarse grinds). FEEDER CATTLE: Feeders have staged a similar reversal as the live market. For the most part, contracts are moderately higher as of this writing. Yet given the damage seen last week, it's not much of a dead cat bounce. On an estimated run of 5,600 head (down from 8,031 last week but up from 4,501 in 2015), Oklahoma City is not well tested in the early going but does report a slightly lower undertone. LEAN HOGS: Lean hog futures continue to rock lower at midday with most of the selling pressure focused on 2017 contracts. Right or wrong, the trade seems to have uncovered a new concern and worry for mounting commercial pork production for next year. The carcass value is modestly lower at midday with stronger demand for ribs and bellies offset by softer sales of hams, picnics, and butts. Pork cut-out: $87.10, off 0.30. CME cash lean index for 07/14: 80.46, off 0.54 (DTN Projected lean index for 07/15: 79.90, off 0.56). John A. Harrington can be reached at john.harrington@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.