Live Cattle Futures Surge Higher

By Rick Kment

GENERAL COMMENTS:
Strong gains have developed through the live cattle futures market. This has
overshadowed the pressure in lean hog markets and outside commodity markets.
Corn futures are lower at midday. July corn futures are holding 6 cent losses
at midday. Stock markets are lower in active trade. The Dow Jones is 62 points
lower while Nasdaq is down 32 points.

LIVE CATTLE:
Sharp triple-digit gains have quickly developed across the live cattle
futures market. With aggressive pressure in outside markets over the last
couple trading sessions, there is more and more interest developing into the
live cattle futures market. With markets potentially oversold, buyers are
willing to aggressively push prices higher at the end of the week. Cash cattle
activity remains quiet Friday morning, although bids have quickly developed
through the morning, it may be later in the day before active trade is seen.
Prices have a good chance of ending steady as packers are extremely short
bought at the end of the week. Beef cut-outs at midday are higher, $0.53 per
cwt higher (select) and up $0.24 per cwt (choice) with light movement of 79
total loads reported (28 loads of choice cuts, 30 loads of select cuts, eight
loads of trimmings, 13 loads of ground beef).

FEEDER CATTLE:
Triple-digit gains have quickly developed through the morning with August
futures holding a $2 per cwt rally at midday. This support is developing
following the strong move in live cattle futures as well as additional pressure
through the grain complex. Trade volume is expected to remain light through the
end of the week.

LEAN HOGS:
Moderate to strong pressure has held through the lean hog futures market
Friday morning. The focus on eroding cash markets and the potential that
seasonal tops have been set is starting to limit buyer interest. This could
allow for further pressure to be seen through the end of the session. Cash
prices are lower on the National Daily Direct morning cash hog report. The
weighted average price fell $1.61 per cwt to $98.05 per cwt with the range from
$90.00 to $99.00 per cwt on 2,699 head reported sold. The National Pork Plant
Report reported 176 loads with prices gaining $1.54 per cwt. Lean hog index for
6/18 is at $103.87 up 0.59 with a projected two-day index of $104.19 up 0.32.

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