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DTN Midday Livestock Comments          07/23 11:56

   Hog Futures Surge Higher Tuesday 

   Strong underlying gains have quickly and aggressively moved back into lean 
hog futures as traders focus on further market support. August futures are 
leading the complex higher, sparking expectations of further support.

By Rick Kment
DTN Analyst

General Comments

   Triple-digit gains have swept through lean hog futures once again, as the 
narrow moves seen Monday allowed traders to regroup, focusing on longer term 
market support. Cattle futures are mixed as firm fundamental support in live 
cattle offset by light feeder cattle weakness. Corn futures are higher in light 
trade. September corn futures are 1/4 cent higher. Stock markets are mixed in 
light trade. Dow Jones is 51 points higher with NASDAQ down 2 points. 


   Light to moderate gains have developed through the morning with nearby 
futures holding 60 cent gains at midday. The underlying support through the 
complex continues to focus on long term support that may continue to develop 
through the upcoming days as traders look for spill over support from the 
recent rally in hog trade. August futures have moved above $109 per cwt, and 
continue to test two month highs, although the intensity of buying appears to 
be slowing during the week. Cash cattle remain quiet with bids and asking 
prices still undeveloped. Given the firmness in live cattle futures, asking 
prices are expected to remain firm once prices are listed, which may delay 
trade until the second half of the week, and limit early bids from most 
packers. Boxed Beef cut-outs at midday are mixed, $0.44 higher (select) and up 
$0.37 per cwt (choice) with light movement of 61 total loads reported (37 loads 
of choice cuts, 12 loads of select cuts, 7 loads of trimmings, 6 loads of 
ground beef).


   Feeder cattle futures remain under light pressure, but losses have quickly 
eroded through late morning. Nearby contracts are holding losses of 7 to 15 
cents per cwt, but well off session lows of 60 to 70 cents seen early in the 
day. The firming support in live cattle trade and limited moves in corn trade 
is weakening any softness in feeder cattle trade, allowing buyers to return to 
the market with potential light to moderate gains by the end of the session.


   Active late-morning gains have flooded the lean hog complex with August 
futures surging $2.67 per cwt with prices nearing $86 per cwt. The underlying 
support remains firmly planted in all nearby contracts as traders are focusing 
on the recent support in cash values and increased wholesale price levels. This 
may add even more support to the complex with increased commercial volume 
developing as prices distance themselves from recent summer lows. Cash prices 
are higher on the National Direct morning cash hog report. The weighted average 
price is up $0.94 at $77.03 per cwt with the range from $64 to $82 on 6,092 
head reported sold. Pork values shifted lower Tuesday backing away from 
previous gains. Pork cutouts fell $1.72 per cwt at $78.89 per cwt with 186 
loads traded. Lean hog index for 7/19 is $73.27, up 0.87, with a projected 
two-day index is $74.29, up 1.03.

   Rick Kment can be reached at 


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