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DTN Midday Livestock Comments          06/20 11:48

   August Hog Contracts This Limit Losses   

   Widespread pressure is quickly redeveloping across lean hog trade as August 
futures are locked in limit losses of $3 per cwt. This pressure is not 
affecting the cattle complex with prices mixed in a narrow range. 

By Rick Kment
DTN Analyst


   Limit lower lean hog futures has continued to add pressure to the entire hog 
market. The combination of weaker futures and lower cash markets is leaving the 
market unsupported. Cattle trade is mixed with nearby gains being offset by 
light to moderate deferred pressure. Corn prices are lower in light trade 
Tuesday. July corn futures are 2 cents lower. Stock markets are mixed in light 
trade. The Dow Jones is 4 points lower while Nasdaq is up 70 points.


   Cattle futures have bounced higher an lower through the morning with very 
limited long-term direction seen across the complex. Nearby contracts are 
holding gains of 20 to 60 cents per cwt, with increased movement developing in 
the entire complex. Prices have shifted higher and lower in a wide range 
through most of the morning with very little long-term direction developing at 
this point. The lack of support in beef values seems to have very little 
indication as to just how much additional movement will develop in the next 
couple weeks. There could be some market shifts developing as deferred 
contracts continue to hold an aggressive premium to the current spot month 
contract. Cash cattle trade is still quiet with bids slowly increasing through 
the morning. Bids are seen at $108 live and $173 to $175 dressed, but this is 
still well below asking prices of $115 live and $183 dressed. It is expected 
that trade will not be seen until later in the week with Friday trade very 
likely. The Fed Cattle Exchange Auction today listed a total of 2,125 head, 
with 1,469 actually sold, with a weighted average of $110.00, 495 head listed 
as unsold, and 161 head listed as PO (Passed Offer). The only states with 
cattle on the list were Kansas and Nebraska, the breakdown looks like this: KS 
656 total head, with zero head sold, 495 head unsold, 161 head listed as PO 
($112.00); NE 1,469 total head, with 1,469 head sold at $110.00, zero head 
unsold, and zero head listed as PO. All cattle listed are for 1-9 day delivery. 
Boxed Beef cut-outs at midday are lower, $1.39 lower (select) and down $0.30 
per cwt (choice) with light movement of 92 total loads reported (47 loads of 
choice cuts, 20 loads of select cuts, 13 loads of trimmings, 11 loads of ground 


   Feeder cattle futures are mixed in a very narrow trading range at midday 
Wednesday. The limited direction seen at the end of the morning seems to be 
somewhat confusing given that prices have bounced higher and lower in a 
moderate to wide range over the last few hours of trade. Currently all 
contracts are hovering within a 20 to 30 cent range with August futures holding 
22 cent losses, while deferred contracts are as much as 7 cents per cwt higher. 
This lack of movement seems to focus on the lack of direction in outside 
markets despite aggressive pressure seen in hog trade.  


   Limit Daily trading ranges have been hit in August contracts with a $3 per 
cwt loss seen through the morning. This is creating widespread pressure through 
the entire complex with traders looking for increased overall movement across 
the complex and additional uncertainty in many other contracts. The follow 
through pressure after prices tumbled to triple digit losses Tuesday has 
further weakened overall market activity in all contracts. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price is down $0.67 at $82.46 per cwt with the range from $76.00 to $83.50 on 
3,520 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price is down $1.15 at $82.20 per 
cwt with the range from $76.00 to $83.50 on 1,080 head reported sold. The 
National Pork Plant Report posted 154 loads selling with carcass values gaining 
$0.16 per cwt. Lean hog index for 6/18 is at $84.05 up 1.19 with a projected 
two-day index of $85.14, up 1.09.

   Rick Kment can be reached at 


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