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DTN Midday Livestock Comments          06/28 11:40

   Livestock Markets Drift Lower Into Tuesday Afternoon

   A lack of trader interest is keep the live cattle and lean hog contracts 
lower, while the corn market's rally keeps feeders at bay.

ShayLe Stewart
DTN Livestock Analyst


   The market hasn't seen a tremendous amount of support come its way since 
Tuesday's arrival, but once the cash cattle market begins to trade, the live 
cattle market could see more support and, for hogs, everyone is seeming to wait 
the week out until they see the Quarterly report. Meanwhile, the feeder cattle 
market's run has been short cut as corn prices work their way higher in 
Tuesday's market. July corn is up 17 1/2 cents per bushel and July soybean meal 
is up $13.70. The Dow Jones Industrial Average is down 174.67 points.


   The live cattle contracts are running into Tuesday's afternoon mostly lower 
as the complex floats, seeming to wait for the cash cattle market to set the 
week's tone. August live cattle are down $0.47 at $133.02, October live cattle 
are down $0.52 at $139.60 and December live cattle are down $0.32 at $145.47. 
Tuesday's lower move doesn't really push the market substantially lower, but it 
keeps the complex moving well within its sideways range until traders can deem 
higher or lower movements appropriate for the week. Packers haven't shown the 
cash market much interest at this point, but bids could begin to develop by the 
afternoon. Some early asking prices are noted at $140 in the South but are 
still inconclusive in the North. Given that market-ready supplies of cattle are 
thin in the North, it's unlikely that packers get cattle bought for anything 
less than steady.

   Boxed beef prices are mixed: choice down $1.75 ($266.93) and select up $0.04 
($245.28) with a movement of 92 loads (66.11 loads of choice, 13.77 loads of 
select, 3.38 loads of trim and 8.31 loads of ground beef).


   As the corn market steps out and pushes a $0.09 to $0.15 rally, the feeder 
cattle market is trading lower as it's closely watching and trying to gauge how 
much strength the corn market's rally possesses. August feeders are down $1.57 
at $172.55, September feeders are down $1.35 at $175.45 and October feeders are 
down $1.02 at $177.90. While the board may be undergoing some pressure come 
Tuesday, the feeder cattle market in the countryside has seen strong demand 
this week as buyers know that there won't be sales next week as auction houses 
take a week off for the Fourth of July holiday.


   The lean hog market is keeping with its downward trend and, as pork cutout 
values neglect to show any support, that has the market's attitude grim. July 
lean hogs are down $0.05 at $110.12, August lean hogs are down $0.57 at $104.30 
and October lean hogs are down $0.70 at $90.32. By Wednesday afternoon, the 
market should be free to either get busy trading higher or turn South and fully 
commit to trading lower as the industry will finally have the latest Quarterly 
report. The average estimates for the report shared that all hogs and pigs are 
estimated at 99.3%, kept for breeding at 98.9% and kept for marketing at 99.3%. 
More cash interest should develop throughout the afternoon as packers weren't 
aggressive buyers in Monday's market.

   The projected lean hog index for June 27 is up $0.27 at $111.62 and the 
actual index for June 24 is up $0.45 at $111.35. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $0.31 with a weighted average of $114.54, 
ranging from $111.50 to $123.75 on 3,651 head and a five-day rolling average of 
$117.40. Pork cutouts total 150.26 loads with 119.16 loads of pork cuts and 
31.10 loads of trim. Pork cutout values: down $0.67, $111.53.

   ShayLe Stewart can be reached

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