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DTN Midday Livestock Comments          07/22 11:54

   Cattle Futures Locked in Limit Higher Trade           

   Strong follow through buying quickly developed across cattle futures Tuesday 
morning. This pushed front month live cattle futures $3 per cwt higher 
following all nearby feeder cattle futures are locked in similar limit higher 
trade. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Front-month live cattle futures and nearby feeder cattle futures have hit 
the daily trading limit Tuesday morning with gains of $3 per cwt locking down 
the market. The aggressive support flooded the complex through morning trade, 
with further expectations of tight supplies creating traders to flood back into 
the market. The cattle market moves have spilled over to the hog complex, 
pushing lean hog futures sharply higher also. Corn futures are lower at midday. 
September corn futures are 2 cents per bushel lower. Stock markets are higher 
in light trade. The Dow Jones is 65 points higher while Nasdaq is up 36 points.

   LIVE CATTLE:

   August live cattle futures have hit limit higher trade midday, locked at 
$155.90 per cwt. This will keep front-month futures from moving to new contract 
highs, but the momentum seen in the market could easily draw additional buyers 
back into the market Wednesday, sparking another round of aggressive buying. 
Very little new direction is seen in the market, although the focus through 
morning trade is once again being placed on the ability to sustain strong 
summer demand and raise questions about the ability to gain access to market 
ready cattle over the near future.  Cash cattle markets remain silent with not 
even token bids seen Tuesday morning. The strong rally in futures markets and 
sharply higher beef values are likely to create some changes in asking prices 
through the middle of week. Beef cut-outs at midday are higher, $2.10 per cwt 
higher (select) and up 3.07 per cwt (choice) with light movement of 98 total 
loads reported (37 loads of choice cuts, 33 loads of select cuts, 10 load of 
trimmings, 18 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have surged higher in all contract months with all 
remaining 2014 contract months locked in limit higher trade of $3 per cwt. The 
continued pressure in the corn market as well as expectation that cattle and 
beef supplies will continue to tighten through late summer and early fall has 
created a swarm of buyer interest flooding into the market Tuesday. It appears 
that the current buyer support is deep enough to hold prices at this level 
through the end of the session, but it is too early to determine just how much 
strength is under this market. 

   LEAN HOGS:

   Early pressure in the lean hog futures has been quickly replaced by moderate 
to strong gains following the limit higher moves in the cattle complex Tuesday 
morning. August lean hog futures are showing the most significant gains, 
rallying over $2 per cwt. Other nearby contracts are holding light to moderate 
gains of 10 to 80 cents per cwt. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $1.03 per cwt to 
$126.01 per cwt with the range from $125.00 to $127.00 per cwt on 1,663 head 
reported sold. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report is 
reported 135 loads selling as prices adding $0.01 per cwt. Lean hog index for 
7/18 is at 133.16 down 0.62, with a projected two-day index of $132.57 down 
0.59.

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


(SK)

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