DTN Midday Livestock Comments          07/24 12:31

   Limit Losses Develop in Cattle Futures 

   Sharp losses flood through cattle trade as limit losses are seen in live 
cattle and feeder cattle futures. The bearish tone of the cattle on feed report 
has created additional pressure on the entire complex. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Limit losses have developed in cattle trade Monday morning in reaction to 
the bearish cattle on feed report seen Friday. This pushed live cattle futures 
$3 per cwt lower in several contracts, while most feeder cattle markets are 
posting $4.50 per cwt losses. Corn prices are lower in light trade. September 
corn futures are 4 cents lower. Stock markets are mixed in light trade. The Dow 
Jones is 50 points lower while Nasdaq is up 10 points.

   LIVE CATTLE:

   Limit losses are seen in October and December contracts have allowed markets 
to create additional market pressure through live cattle futures. There 
continues to be a bearish undertone across the entire cattle market as traders 
focus on the sharp losses in feeder cattle trade as well as general pressure in 
the live cattle complex. This could significantly weaken fundamentals even 
though technical factors have not been impacted at this point. Cash cattle 
remain quiet with bids and asking prices undefined at this point in the week. 
Show lists appear to be overall larger across the country with Texas the only 
area with smaller offerings early in the week. It is likely going to be midweek 
before active bids develop given the defensiveness of futures trade. Beef 
cut-outs at midday are higher, $2.77 higher (select) and up $0.53 per cwt 
(choice) with light movement of 41 total loads reported (23 loads of choice 
cuts, 10 loads of select cuts, no loads of trimmings, 8 loads of ground beef). 

   Feeder Cattle:

   Limit losses have quickly developed across feeder cattle futures as traders 
have focused on the bearish news in the July 1 cattle on feed report. The 
increased placement numbers seen during June has added to the concerns through 
the entire complex. This has weakened the entire cattle market and could set 
the tone for the entire week.     

   LEAN HOGS:

   Triple-digit losses have moved through nearby lean hog futures trade with 
October through April lean hog futures posting losses of $1 to $1.25 per cwt as 
spillover pressure is seen from the weakness in the cattle futures. August 
futures remain under pressure with prices hovering above $80 per cwt with 
95-cent-per-cwt losses. The continued pressure in cash trade continues to add 
to the lack of support in the lean hog complex. This may add even more softness 
to the market through the near future as traders try to bring some underlying 
stability to the market in the next couple of weeks. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$1.19 at $82.13 per cwt with the range from $77.00 to $83.25 on 4,944 head 
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash 
hog report. The weighted average price fell $0.71 at $82.86 per cwt with the 
range from $77.00 to $83.00 on 2,015 head reported sold. The National Pork 
Plant Report reported 101 loads selling with prices falling $0.67 per cwt. Lean 
hog index for 7/20 is at $91.67 down $0.33 with a projected two-day index of 
$91.13, down $0.54.   

   Rick Kment can be reached at rick.kment@dtn.com 


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