DTN Midday Livestock Comments          06/14 12:07

   Hog Futures Shift Lower Once Again 

   Lean hog trade continues to chop higher and lower through the week within 
the same moderate-to-weak trading range. Triple-digit losses developed midday 
Friday as traders return the focus on uncertain long-term demand.

By Rick Kment
DTN Analyst

General Comments

   Firm pressure quickly developed in lean hog and feeder cattle trade Friday 
morning as traders once again face strong grain market support which will 
increase production costs in all livestock markets. Triple-digit hog losses are 
leading the complex lower. Corn futures are higher in moderate trade. July corn 
futures are 9 cents higher. Stock markets are lower in light trade. Dow Jones 
is 52 points lowerwith NASDAQ down 36 points. 

   LIVE CATTLE:

   Mixed live cattle trade is seen through midday with nearby futures steady to 
30 cents higher based on end of the week positioning and underlying firmness in 
beef values. Deferred futures are shifting lower with narrow losses slowly 
replacing initial buyer support seen Friday morning. Trade is expected to 
remain sluggish through the end of the complex, limiting overall market 
direction in live cattle trade despite firm continued pressure in feeder cattle 
futures. Cash cattle markets remain generally undeveloped, although active bids 
are seen in most areas. Bids are seen at $112 to $114 live and $185 dressed. It 
is expected that at least light trade will need to be done Friday in order to 
secure desired procurement levels next week. Asking prices remain at $114 and 
higher live and $187 and higher dressed. Boxed Beef cut-outs at midday are 
mixed, $0.26 lower (select) and up $0.21 per cwt (choice) with moderate 
movement of 64 total loads reported (46 loads of choice cuts, 11 loads of 
select cuts, no loads of trimmings, 7 loads of ground beef).

   FEEDER CATTLE:

   Firm losses have continued to develop through the feeder cattle trade 
following increased corn prices during the morning. Traders continue to focus 
on the short and long term impact of higher feed prices and the impact on not 
only cash prices paid for feeders, but also the overall impact on beef 
production over the next year. Trade is hovering in a narrow to moderate range 
with prices 50 to 80 cents per cwt lower at midday.

   LEAN HOGS: 

   Active pressure is quickly moving into lean hog trade with triple-digit 
losses seen in most midday contracts as prices are $1.50 to $1.80 per cwt 
lower. The lack of support has moved July futures below last week's support 
levels posting the lowest prices since early March. Continued strong domestic 
production remains a long-term concern for the entire market with limited 
export demand likely from China in order to help tighten supplies. Even though 
China needs pork, the assumption that they would buy aggressively from us given 
the trade war tensions is misguided. Some future sales are expected to move to 
China, but until a trade deal is reached and relations improve, active exports 
to the country are not likely. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price is down $0.14 at $75.69 per 
cwt with the range from $67 to $76.75 on 6,890 head reported sold. Cash prices 
are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash 
hog report. Pork values firmed following mixed prices in primal cuts. Pork 
cutouts added $0.85 per cwt at $83.86 per cwt with 148 loads traded. Lean hog 
index for 6/12 is $79.57, up 0.03, with a projected two-day index is $79.46, 
down 0.11.

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


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