DTN Midday Livestock Comments 07/28 11:52
Meat Futures Pull Back at Midday from Early Session Highs
The cattle complex is mixed near the top of the noon hour with live contacts
mostly lower and feeder issues primarily higher. Lean hog futures are
moderately lower at midday as early buying energy fades.
By John Harrington
Activity in cattle country is limited to the distribution of new showlists.
Generally speaking, ready numbers of steers and heifers appear to be larger
than last week, though the fed supply in Kansas looks about steady. A few
asking prices have been suggested around $170 on the South and $270 in the
North. According to the midday report, the national hog base is $2.85 lower
compared with the Prior Day settlement ($112.00-123.01, weighted average
$121.37). Corn futures are 1-3 cents higher in late-morning business, boosted a
bit by early week short covering and spillover strength from the bean pit. The
stock market is under pressure near midday with the Dow industrials falling to
a one-month low. The Dow is off by 30 points with the Nasdaq down 18.
Mixed, up 70 to off 107. Nearby futures open significantly higher but
quickly attracted long liquidation and spec selling. The trade remains very
volatile, perhaps not surprising given the thin air that typically accompanies
record price action. Floor talk blames nervous ties to wholesale beef demand.
Can it be sustained at these levels? Beef cut-outs are significantly higher at
midday, up $1.39 (choice, $258.77) to $1.71 (select, $256.04) with very light
box movement (21 loads of choice cuts, 11 loads of select cuts, eight loads of
trimmings, 12 loads of coarse grinds).
Up 72 to 132. Though feeder contracts have also retreated from early highs
through the morning, most contacts continue to hold decent gains at midday. The
tight implications of the midyear herd inventory released on Friday are
certainly supportive of the general bullish case.
Mostly 12 to 65 lower. Lean futures appeared to be on the mend through
midsession, but selling interest resurfaced tied in part to another round of
lower packer bids in the country. Cattle bulls trimming their sails has also
made it tougher here. Carcass value is sharply higher at midday, juiced by a
$12.36 surge in the belly primal. Pork cut-out: $133.52, up $1.73. CME cash
lean 07/24: 130.33, off 0.86 (DTN Projected lean index for 07/25: 129.76, off
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