Friday Midday Livestock Market Update

GENERAL COMMENTS:

Sharp triple-digit losses have quickly developed through cattle trade with nearby futures contracts holding losses from $1.50 to $2 per cwt. The lack of buyer interest redeveloping at the end of the week following moderate to strong support Thursday has created additional market uncertainty. Corn prices are higher in light trade. September corn futures are 1 cent higher. Stock markets are lower in light trade. The Dow Jones is 2 points lower while Nasdaq is down 3 points.

LIVE CATTLE:

Sharp end-of-week price pressure has quickly developed across the live cattle futures trade with nearby futures holding losses of $1.50 to $2 per cwt lower at midday. The swift move from narrow losses early in the session to aggressive triple-digit losses has created additional uncertainty through the complex and may lead to even more market pressure and contract liquidation once traders come back to the market Monday as the close out the month of July. Cash cattle markets are showing light activity in the south Friday morning with clean-up trade seen in Texas at $117 per cwt. Clean-up activity is expected to be the only activity seen through the rest of the day, although the tone of the market seems to be set with live prices at $117 per cwt and dressed basis at $188 per cwt. Generally prices for the week have been $2 to $3 per cwt lower than last week's levels. Beef cut-outs at midday are lower, $0.77 lower (select) and down $0.94 per cwt (choice) with light movement of 69 total loads reported (41 loads of choice cuts, 13 loads of select cuts, 3 loads of trimmings, 11 loads of ground beef).

Feeder Cattle:

Sharp losses have developed through feeder cattle futures with nearby contracts quickly moving from narrow market losses early in the session to losses nearing $2 per cwt at midday. The overall lack of trade volume and continued fundamental pressure held over the complex continues to create uncertainty through the complex as a whole and leave buyers unwilling to step into the market at the end of the week.

LEAN HOGS:

Early market activity remained mixed in a narrow trading range, but the pressure developing in cattle futures quickly leaked into nearby lean hog futures contracts at the end of the week and has caused moderate to significant pressure to nearby lean hog futures through late-morning trade. Trade volume has remained extremely sluggish through most of the morning, with traders holding losses of 80 cents to $1.20 per cwt in remainder 2017 contracts as the focus is moving to end of the week and month position taking. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.05 at $80.96 per cwt with the range from $80.00 to $82.75 on 4,108 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.27 at $81.53 per cwt with the range from $80.00 to $82.75 on 1,545 head reported sold. The National Pork Plant Report reported 147 loads selling with prices falling $1.14 per cwt. Lean hog index for 7/26 is at $89.39 down $0.45 with a projected two-day index of $88.75, down $0.64.