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DTN Midday Livestock Comments          08/16 12:04

   Hog Markets Post Limit Gains

   Nearby lean hog futures have posted $3 per cwt gains, which has hit the 
daily trading limit. The focus on the potential for announced talks with China 
improving the trade situation has sparked widespread buying.

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp triple-digit gains have flooded through hog futures through the 
morning with nearby contracts holding daily trading limits of $3 per cwt gains. 
This is focusing on the potential support that could develop from news of 
upcoming China talks. Cattle markets remain mixed in a narrow range with the 
focus Thursday placed on most other commodity market gains. Corn markets are 
lower in light trade activity. September corn futures are 4 cents higher. Stock 
markets are higher in active trade. The Dow Jones is 394 points higher while 
Nasdaq is up 61 points.

   LIVE CATTLE:

   Live cattle futures are mixed in a narrow trading range from 15 cents lower 
to 10 cents higher. The firm gains seen through late morning seem to be losing 
support as renewed pressure developed midday. This is likely to keep prices 
shifting higher and lower in a very narrow trading range as traders seem to 
focus less on overall outside market moves and potential shifts in cash and 
boxed beef trade at the end of the week. The overall lack of wide market shifts 
also is tied to limited volume, which has been seen over the last couple of 
weeks. Cash cattle activity remains quiet with bids redeveloping in the same 
range as earlier in the week. Bids are seen at $108 live and $172 to $173 
dressed. Asking prices still well above current bids at $112 and higher live 
and $178 and higher dressed. Active trade may not be seen until sometime 
Friday. Boxed Beef cut-outs at midday are mixed, $0.56 higher (select) and down 
$0.94 per cwt (choice) with light movement of 65 total loads reported (24 loads 
of choice cuts, 21 loads of select cuts, 8 loads of trimmings, 11 loads of 
ground beef).

   FEEDER CATTLE:

   Buyer support has moved back into the complex midday Thursday following 
lackluster interest which kept prices mixed through most of the morning. The 
strong renewed support in lean hog trade as well as gains in most other 
commodity markets has helped to bring about increased overall support through 
the quietly traded cattle complex. Nearby feeder cattle futures are holding 
gains of 40 to 50 cents per cwt, while the rest of the complex is steady to 20 
cents higher in a very narrow range due to the limited trade activity. The 
focus on renewed upcoming talks with China does not have a strong direct 
connection to the cattle market at this point, but buyers seem to be focusing 
on the bullish overall tone based on overall association to other commodity 
markets.

   LEAN HOGS:

   Sharp gains have flooded the market following interest in most other 
commodities Thursday. The news of renewed talks with China has helped to refuel 
a bullish overall market trend as many seeing this as a glimmer of hope that 
current and proposed tariffs may be avoided in the future if both sides 
continue to negotiate. October and December contracts are holding $3 per cwt 
gains with increased overall support through the complex. This has continued to 
push nearby and deferred futures further away from long-term support levels 
which developed last week. Even though deferred contracts remain less 
aggressive, triple-digit gains are seen in all contract months. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price is down $0.43 at $41.70 per cwt with the range from $40.00 to $42.50 on 
4,567 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price is down $0.30 at $42.01 per 
cwt with the range from $42.00 to $42.25 on 1,062 head reported sold. The 
National Pork Plant Report posted a total of 135 loads selling with cutout 
values gaining $0.28 per cwt at $68.77 per cwt in the morning report. Lean hog 
index for 8/14 is at $55.23 down 1.58 with a projected two-day index of $54.21, 
down 1.02.

   Rick Kment can be reached at rick.kment@dtn.com


(SK)

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