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DTN Midday Livestock Comments          06/30 12:08

   Cattle Futures Slide Lower              

   Sharp pressure is holding across cattle futures as traders focus on higher 
feed prices following the grain market rally as well as uncertainty. Hog 
futures are holding sharp gains Tuesday. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Sharp losses in cattle futures are being offset by the aggressive nature of 
gains developing in lean hog trade. The support in grain prices is adding to 
the market shifts, as well as end of the month and quarter positioning that is 
taking place. Corn prices are higher in active trade. December corn futures are 
20 cents per bushel higher. Stock markets are higher in light trade. The Dow 
Jones is 9 points higher while Nasdaq is up 15 points.

   LIVE CATTLE:

   The bearishness seen through feeder cattle futures has been impossible for 
live cattle traders to overlook through the morning Tuesday. This could spark 
additional end-of-day concern as not only are traders dealing with uncertain 
fundamental support surrounding the holidays, but also the wild shifts in 
outside markets, and end-of-month and -quarter positioning taking place. Cash 
cattle markets are quiet which may continue to limit activity through the rest 
of the day. Asking prices remain limited, but starting around $150 per cwt in 
the South and $240 in the North. Beef cut-outs at midday are mixed, 0.46 lower 
(select) and down 0.76 per cwt (choice) with light movement of 74 total loads 
reported (37 loads of choice cuts, 12 loads of select cuts, 15 loads of 
trimmings, 10 loads of ground beef).

   FEEDER CATTLE:

   Limit down trade has swept through the complex Tuesday morning. The market 
was already bearish in early trade, and the bullishness of the USDA crop 
reports only added weakness to the entire complex. A close at the $4.50 per cwt 
imposed trading limit would allow for expanded limits Wednesday, which could 
add even more uncertainty to the volatile market. 

   LEAN HOGS:

   Sharp triple-digit gains have quickly flooded back into the market with 
summer contracts focusing on short covering activity. There is expected to be 
some additional longer term support developing after the first of July, but 
this could spark additional volatility given the light trade seen over next 
couple of trading sessions. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $0.61 per cwt to 
$72.94 per cwt with the range from $71.66 to $74.75 per cwt on 4,601 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 253 loads selling with prices falling $1.08 per cwt. Lean hog index 
for 6/26 is at $77.64 down 0.49, with a projected two-day index of $77.32 down 
0.32.  

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


(BAS)

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