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DTN Midday Livestock Comments          08/22 12:13

   Cattle Gains Continue 

   Active support has continued to move into live cattle trade Thursday morning 
with increased underlying support adding confidence to commercial buyers.

By Rick Kment
DTN Analyst

General Comments

   Very little changed in fundamental or technical market trends have allowed 
traders to focus on recent market direction. This has sparked increased active 
support in live cattle trade midday Thursday. Continued pressure is seen in 
lean hog trade with traders focusing on bearish fundamental weakness still 
developing. Corn futures are steady to higher in light morning trade. September 
corn futures are 1/2 cent higher. Stock markets are mixed in light trade. Dow 
Jones is 38 points higher with NASDAQ down 40 points. 

   LIVE CATTLE:

   Firm gains have moved back into live cattle trade with lightly traded August 
futures leading the surge higher, holding a $2 per cwt gain at midday. Although 
there is limited widespread interest will be seen following the triple-digit 
gains in August futures, this is helping to spark some spill over buying into 
all contracts. October futures are holding 67 cent gains at midday. This is 
solidifying commercial trade interest as traders focus on steady but firm 
growth potential over the next couple of days. Prices are still nearly $7 per 
cwt below levels before markets imploded nearly two weeks ago, creating 
consistent continued market support still uncertain. Cash market trade is still 
undeveloped Thursday morning, although bids are becoming more evident. Bids are 
seen at $105 in the South and $172 to $175 dressed in the North. This could 
help to stimulate additional trade interest, but most likely trade will be 
delayed until Friday. Boxed Beef cut-outs at midday are mixed, $2.38 higher 
(select) and down $2.39 (choice) with light movement of 49 total loads reported 
(29 loads of choice cuts, 14 loads of select cuts, no loads of trimmings, 6 
loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures remain mixed in limited activity with nearby futures 
supported by moderate to strong gains in live cattle trade. August through 
October contracts continue to hold 10 to 70 cent gains, based on the stability 
in grain markets and potential for additional spillover support through the 
entire complex. The potential to add steady but firm commercial interest 
redeveloping through the end of the month may create a strong underlying base 
on which traders can build in the near future.

   LEAN HOGS: 

   Sharp losses have continued to develop through the entire lean hog complex 
Thursday morning following the midweek reversal seen through the complex late 
Wednesday. Although prices have continued to hold above long term support 
levels seen last week, the concern that additional market weakness will be able 
to shatter any sense of market support that has developed is causing any buyers 
to remain nervous. The looming uncertainty surrounding any trade deal or 
business with China continues to create questions if domestic demand will be 
able to keep up with the aggressive pace that plants continue to keep during 
the late summer months. Cash prices are lower on the National Direct morning 
cash hog report. The weighted average price is down $0.91 at $66.63 per cwt 
with the range from $57 to $71.50 on 7,688 head reported sold. Pork values 
shifted lower following firm pressure in most primal cuts. Pork cutouts fell 
$1.13 per cwt at $80.11 per cwt with 226 loads traded. Lean hog index for 8/17 
is $77.40, down 0.59, with a projected two-day index unavailable at this time.

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


(CZ)

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