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DTN Midday Livestock Comments          08/25 11:55

   Hog Futures Tumble Lower Thursday  

   Lean hog contracts remain unsupported with triple-digit losses quickly 
moving into the complex. The pressure across all livestock markets remains 
extremely evident during the morning Thursday despite moderate support in beef 
and pork values in morning reports. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Triple-digit losses have redeveloped in lean hog and feeder cattle futures 
with traders focusing on the potential of weakness in grain markets as sparking 
larger short- and long-term production. Live cattle futures continue to hold 
narrow losses due in part to moderate gains in boxed beef values. Corn prices 
are lower in light trade. September corn futures are 3 cents lower. Stock 
markets are mixed in light trade. The Dow Jones is 5 points lower while Nasdaq 
is up 8 points.

   LIVE CATTLE:

   Narrow price shifts have held Thursday morning in all live cattle futures as 
traders have quickly looked past the pressure in the cash cattle trade, and 
focus on the potential of bringing some much needed stability back into the 
cattle complex. Firming beef values helped to limit selling pressure, although 
overall tone of the market remains weak. Nearby prices are holding 7 to 25 cent 
per cwt losses, with traders looking for slightly improved beef values to 
continue through the end of the week. Cash cattle trade may be done for the 
week following the light to moderate activity that took place late Wednesday. 
Prices on cattle sold are seen mostly $3 lower than last week in the South and 
$5 per cwt lower in the North. Even lower bids are being floated Thursday 
morning with bids in the North at $179 per cwt. Beef cut-outs at midday are 
higher $0.62 higher (select) and up $0.84 per cwt (choice) with light movement 
of 53 total loads reported (25 loads of choice cuts, 16 loads of select cuts, 8 
loads of trimmings, 4 loads of ground beef). 

   FEEDER CATTLE: 

   Last minute position shifting is being done in August feeder cattle futures 
which expire at noon during the day. This market shift accounts for the only 
positive price moves through the complex. The rest of the market is holding 
strong losses with nearby futures holding triple-digit losses. Trade through 
the feeder cattle futures complex remains extremely light, allowing for even 
more price volatility through the complex. Traders continue to focus on the 
price spread between live cattle and feeder cattle markets, which may spark 
additional pressure through the market over the coming weeks in order to better 
support fed cattle margins.   

   LEAN HOGS:

   Additional widespread market weakness has quickly developed through lean hog 
trade Thursday morning with triple-digit gains holding in most contract months. 
Front month October contracts are showing the most aggressive pressure, falling 
$1.55 per cwt lower as traders remain clearly aware of the lack of support 
through market fundamentals. Even though narrow support in pork values in the 
morning pork cutout report was unable to draw active support back into the 
market. Even though prices are holding slightly above lows set in early August, 
the potential to break through this support level could bring about additional 
widespread liquidation. Cash prices are lower on the National Direct morning 
cash hog report. The weighted average price fell $0.85 per cwt to $61.36 per 
cwt with the range from $59.50 to $62.50 per cwt on 4,327 head reported sold. 
Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The 
weighted average price fell $0.73 per cwt to $61.83 per cwt with the range from 
$61.75 to $62.50 per cwt on 1,814 head reported sold. The National Pork Plant 
Report reported 128 loads selling with prices gaining $0.61 per cwt. Lean hog 
index for 8/23 is at $66.99, up 0.03 with a projected two-day index of $67.04 
up 0.05.

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


(CZ)

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