Strong Gains Develop in Livestock Futures

By DTN/The Progressive Farmer

Strong Gains Develop in Livestock Futures
The surge in lean-hog buying activity is developing widespread gains in the
livestock market. Trade activity is expected to remain firm through the rest of
the session.
By Rick Kment
DTN Analyst
GENERAL COMMENTS:
Livestock futures are holding sharp triple-digit gains at midday as strong
fundamental support is being combined with outside market buying interest. Corn
futures are higher at midday. July corn futures are holding 8 cent gains at
midday. Stock markets are lower in light trade. The Dow Jones is 20 points
lower while Nasdaq is down 11 points.
LIVE CATTLE:
The narrow gains seen through the first hour of trade has been replaced by
triple-digit gains. Although there is still a lot of focus on the direction of
beef values. The support of outside markets is helping draw widespread support
to the complex. Cash cattle activity is quiet with a few token bids of $120 per
cwt in Kansas. Asking prices are at $124 in the South and $200 and higher in
the North. Active trade will likely be pushed off until the end of the week,
although packers will likely remain short bought. Beef cut-outs at midday are
mixed, $0.86 per cwt higher (select) and down $0.12 per cwt (choice) with
active movement of 138 total loads reported (59 loads of choice cuts, 49 loads
of select cuts, four loads of trimmings, 11 loads of ground beef).
Feeder Cattle:
Even though very little buying support was seen through the early part of
the session, traders have quickly jumped back into the market. The surge higher
in both the live cattle futures and lean hog futures market is sparking
interest across the entire feeder cattle market. This could draw additional
support into the market over the end of the trading session.
LEAN HOGS:
Nearby lean hog futures have led the surge higher through the morning. The
focus on the potential firmness in both cash hog values and pork prices are
keeping commercial buyers active through the summer contracts. Traders are
focusing on additional potential gains, which is keeping July futures nearly $2
per cwt higher at midday. Cash prices higher on the National Daily Direct
morning cash hog report. The weighted average price gained $0.16 per cwt to
$95.86 per cwt with the range from $92.23 to $103.00 per cwt on 3,331 head
reported sold. The National Pork Plant Report reported 218 loads with prices
gaining $1.78 per cwt. Lean hog index for 6/07 is at $97.48 up 0.33 with a
projected two-day index of $97.96 up 0.48.
Rick Kment can be reached at rick.kment@telventdtn.com

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