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DTN Midday Livestock Comments          06/19 12:00

   Cattle Gains Offset Hog Market Losses  

   Moderate to firm buyer support is seen in the cattle complex with increased 
overall support developing across all futures trade. Lean hog futures have 
posted aggressive losses, as traders adjust to previous market gains over the 
last few sessions. 

By Rick Kment
DTN Analyst


   Cattle market gains are being offset by aggressive triple-digit pressure in 
the hog trade. The overall softness in outside markets through the morning has 
limited trade volume and keep prices shifting in a moderate to wide range. Corn 
prices are lower in light trade Tuesday. July corn futures are 2 cents lower. 
Stock markets are lower in light trade. The Dow Jones is 345 points lower while 
Nasdaq is down 64 points.


   August live cattle futures are holding a $1 per cwt gain with increased 
overall support developing across the market despite early pressure seen in the 
market. All nearby live cattle trade seems to be focusing on the ability to 
bring additional solid commercial buying interest back to the table. There may 
be some additional support seen through the end of the day, although given 
weakness in outside markets, the gains in the cattle complex are gaining even 
more attention. Cash cattle markets are quiet with bids currently undeveloped 
for the week. A few asking prices are seen in the South at $115 live basis. 
There is increased support that additional movement may continue to develop 
across the complex, which may add some uncertainty to the complex over the near 
future. Active trade is likely to be pushed off until late in the week. Boxed 
Beef cut-outs at midday are lower, $1.26 lower (select) and down $0.46 per cwt 
(choice) with light movement of 75 total loads reported (30 loads of choice 
cuts, 25 loads of select cuts, 7 loads of trimmings, 12 loads of ground beef). 


   Moderate support is seen in feeder cattle and live cattle trade midday 
Tuesday. The most aggressive strength is seen in deferred contracts focusing on 
sharp pressure in outside markets and the grain complex specifically. This may 
add even more support to the entire complex as traders look for increased 
underlying support from the live cattle complex through the week. Nearby 
contracts are holding gains of 60 to 80 cents per cwt with limited activity 
seen through the entire complex. 


   Traders are quickly backing away from early week gains. The support seen 
Monday helped to push prices to two-month highs, but traders have quickly 
adjusted markets due to sharp outside market pressure. Nearby contracts are 
approaching $2 per cwt losses with concern that the general weakness in most 
commodity markets will not only affect futures traders, but could quickly move 
into cash markets. Trade volume has slowed, but the overall tone of the market 
remains weak. Cash prices are unreported due to confidentiality on the National 
Direct morning cash hog report. Cash prices are unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. The 
National Pork Plant Report posted 197 loads selling with carcass values gaining 
$0.30 per cwt. Lean hog index for 6/15 is at $82.86 up 1.42 with a projected 
two-day index of $84.05, up 1.19.

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


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