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DTN Midday Livestock Comments          06/21 11:42

   Weakness Continues in Hog Complex   

   Moderate to firm losses have redeveloped through the hog complex Thursday 
morning. This is holding most nearby contracts nearly $1 per cwt lower as 
traders remain concerned about fundamental support and long-term pork demand. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Light to moderate losses are seen in most livestock trade Thursday. Live 
cattle futures are showing the most stability with losses seen from 20 to 50 
cents per cwt through most of the morning. Hog futures continue to lead the 
market lower with traders focusing on the lack of buyer support willing to move 
back into the market following the sharp $5 per cwt market slide over the last 
week. Corn prices are higher in light trade Tuesday. July corn futures are 2 
cents higher. Stock markets are lower in light trade. The Dow Jones is 163 
points lower while Nasdaq is down 40 points.

   LIVE CATTLE:

   Narrow losses are holding in all cattle futures with prices seen 22 to 46 
cents per cwt lower at midday due to very limited trade activity and limited 
direction in the market. Traders continue to look for an indication in cash 
market activity, which could add some increased volume to the market. But this 
may not move price levels, or spark any additional trade volume to move through 
the already quiet market structure. There is likely to be some increased 
movement through the end of the week, but given the recent support in the 
complex, prices may not move significantly through the remainder of June. Cash 
bids have returned to the market with no significant change over the last 
couple of days. Bids are seen at $108 live basis and $172 to $178 dressed. This 
is not likely to spark active trade at this point with the stability in futures 
and willingness of feeders to wait until the end of the week. Asking prices are 
holding at $115 live and $183 dressed. Boxed Beef cut-outs at midday are mixed, 
$0.37 higher (select) and down $0.89 per cwt (choice) with light movement of 53 
total loads reported (27 loads of choice cuts, 15 loads of select cuts, 3 loads 
of trimmings, 8 loads of ground beef). 

   FEEDER CATTLE:

   Light market erosion is seen through feeder cattle trade through the morning 
Thursday. Traders are showing increased market apathy with front month August 
futures slipping $1 per cwt at midday. This overall lack of support in the 
complex has little to do with wide spread market shifts or changing market 
direction. The inability for strong commercial support to move back into the 
market over the last couple hours and hesitancy to move prices above the $150 
per cwt threshold is creating some moderate selling activity. Trade volume 
through the entire complex remains extremely light, which may add uncertainty 
to the entire complex over the rest of the Thursday session as well as the 
remainder of the week. 

   LEAN HOGS:

   Firm pressure has been seen in most hog futures with October through April 
contracts holding losses near $1 per cwt at midday as the concern of demand 
erosion through the next six to nine months has added even more market 
pressure. Nearby contracts have posted a $5 per cwt loss through the week with 
contracts testing May lows and could continue to show additional market 
pressure through the rest of the month. Although August futures has not broken 
through initial support of $74.25 per cwt set mid-May, the lack of buyer 
support and general weakness in the complex may add even more softness to the 
complex. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price is down $0.47 at $82.08 per cwt with the range from 
$75.00 to $82.50 on 3,712 head reported sold. Cash prices are lower on the 
Iowa/Minnesota Direct morning cash hog report. The weighted average price is 
down $0.43 at $82.23 per cwt with the range from $80.75 to $82.50 on 1,197 head 
reported sold. The National Pork Plant Report posted 121 loads selling with 
carcass values falling $0.18 per cwt. Lean hog index for 6/19 is at $85.14 up 
1.09 with a projected two-day index of $85.79, up 0.65.

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


(SK)

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