DTN Midday Livestock Comments 07/27 11:53

DTN Midday Livestock Comments 07/27 11:53 Live Cattle Futures Maintain Narrow Gains Livestock futures remain mixed at midday following lack of support in meat values and inactivity through the cash cattle market. Lean hog futures continue to lead the complex lower, while the cattle market is stuck in a very narrow but mixed trading range at midday. By Rick Kment DTN Analyst GENERAL COMMENTS: Additional pressure is seen through the hog complex as traders continue to focus on the underlying lack of support in both cash hog values and the sharp losses seen in the morning pork cutout report. This continues to limit buyer interest, which may allow markets to see further market erosion through the end of the week. Cattle futures are mixed following renewed buyer support midmorning. The lack of additional market news is causing traders to back away from previous buyer support. Corn prices are higher in light trade. September corn futures are 2 cents higher. Stock markets are mixed in light trade. The Dow Jones is 21 points lower while Nasdaq is up 15 points. LIVE CATTLE: Mixed trade is seen through the live cattle futures complex as the momentum seen from buyer support midmorning has quickly eroded. The lack of follow-through support in beef values in the morning report continues to create questions through the entire complex if the recent gains in futures prices will be able to be sustained and pushed through market fundamentals. If beef values and cash cattle trade is unable to follow the recent gains higher in futures, the longevity of widespread futures buyer support will be in jeopardy. Nearby live cattle futures are holding narrow gains of 10 to 30 cents per cwt, although trade volume remains extremely thin, while deferred futures are posting narrow losses. Cash cattle activity is quiet Wednesday morning with the bids that slowly developed on Tuesday even unable to be reoffered at this point. The lack of general direction in the futures market through the morning and stable beef values have both sides trying to focus on the potential long-term market direction at the end of July. It is likely that trade will be pushed into Thursday or Friday with late Friday trade a strong possibility. Beef cut-outs at midday are mixed in a narrow range $0.22 lower (select) and up $0.04 per cwt (choice) with active movement of 109 total loads reported (46 loads of choice cuts, 28 loads of select cuts, 8 loads of trimmings, 27 loads of ground beef). FEEDER CATTLE: Gains seen at midday through the cattle complex have started to erode with light to moderate pressure now seen in feeder cattle futures. Trade volume through the complex remains at a near standstill as traders are unwilling to aggressively sell into the market which has shown significant support over the last three sessions. But the lack of fundamental support developing as traders head toward the end of July is causing buyers to remain on the sidelines for the moment. Nearby contracts are holding 5 to 20 cent losses while deferred contracts are holding slightly more aggressive pressure of 40 to 50 cents per cwt based more on lack of interest than any other market factor. LEAN HOGS: Triple-digit losses are seen through nearby lean hog futures midday Wednesday following continued pressure in the cash complex as well as a sharp loss posted in pork values on the morning report. The fact that overall pork movement was strong at the aggressive price reduction continues to lead traders to back away from nearby contracts. Deferred futures posted much less aggressive selling activity as prices are holding at 17 to 50 cent losses, But volume remains light in these deferred contracts as most traders continue to focus on the pressure in nearby contract months. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.31 per cwt to $66.73 per cwt with the range from $64.00 to $68.50 per cwt on 3,290 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 209 loads selling with prices falling $4.01 per cwt. Lean hog index for 7/22 is at $76.45, down 0.68 with a projected two-day index of $75.65 down 0.80. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.