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DTN Midday Livestock Comments          08/21 12:00

   Hog Futures Add Market Pressure with Triple-Digit Losses

   Strong pressure has quickly developed in lean hog trade Monday despite the 
shift higher in pork cutout values on the morning report. Concerns of supply 
growth are seen in both cattle and hog futures, which is limiting buyer 
interest. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Livestock futures are trading mostly lower at midday despite buyers stepping 
into the cattle complex earlier in the session. The moderate shifts seen 
through the morning are likely to keep prices variable through the rest of the 
session. Strong underlying pressure is redeveloping in hog trade despite 
firming pork values on the morning report. 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 9 points higher while the Nasdaq is down 6 points.

   LIVE CATTLE:

   Live cattle futures have turned lower once again at midday after trading in 
a moderately mixed range through the morning Monday. August live cattle futures 
have focused on the bearish tone seen in nearby feeder cattle trade, with 
losses of 52 cents per cwt at midday. Even though moderate losses continue to 
hold at midday, the ability for buyers to actively step into the complex 
through the morning has helped to put focus on the potential of market 
stability through the week. Cash cattle activity remains quiet with traders 
focusing on showlist distribution and inventory-taking through much of the 
morning, which will likely keep bids and asking prices generally undeveloped 
through the session. It is likely to be the middle to end of the week before 
active cash market activity redevelops. The concern surrounding growing 
supplies may continue to put pressure on cash values. Beef cut-outs at midday 
are lower, $0.06 lower (select) and down $0.78 per cwt (choice) with light 
movement of 58 total loads reported (29 loads of choice cuts, 11 loads of 
select cuts, 10 loads of trimmings, 7 loads of ground beef). 

   FEEDER CATTLE:

   Mixed trade continues to be seen in feeder cattle futures as trade has 
bounced higher and lower through the morning. Most activity has been focused on 
the defensive tone of the market with nearby contracts holding moderate to 
strong losses through much of the morning. August through November futures are 
holding triple-digit losses at midday while the rest of the complex is mixed in 
a narrow range. The back and forth seen in the market is creating some 
additional concerns through all trade, which is focusing on the inability for 
traders to draw additional market activity back into the complex. 

   LEAN HOGS:

   Strong pressure has redeveloped through the lean hog futures complex with 
traders focusing once again on the overall lack of support in cash markets on a 
national level while traders are unable to hold summer support values. October 
futures have fallen below $65 per cwt, and a move below January support of 
$64.40 per cwt would likely spark additional liquidation through the complex. 
All contracts through April 2018 are posting triple-digit losses, which 
continues to limit overall market support early in the week. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price fell $0.88 at $72.48 per cwt with the range from $68 to $74 on 3,424 head 
reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash 
hog report. The weighted average price gained $0.53 at $73.74 per cwt with the 
range from $68 to $74 on 264 head reported sold. The National Pork Plant Report 
reported 149 loads selling with prices adding $0.62 per cwt. Lean hog index for 
8/17 is at $83.19 down $0.51 with a projected two-day index of $82.35, down 
$0.84.  

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


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