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DTN Midday Livestock Comments          07/05 11:50

   Skepticism Brews in Tuesday's Market

   Largely the markets have a tough start to the week as the commodity markets 
trends mostly lower.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   The livestock complex is enduring a tough go to Tuesday's start as the 
contracts mostly trend lower into the day's afternoon, as traders seem 
unwilling to dip their toes into the marketplace at this point. Both the live 
cattle and feeder cattle contracts started the day off strong, rallying on the 
corn market's regression, but since then the market's weaker tone has spread 
wider and even pushed the cattle contracts into a downward ascend. December 
corn is down 33 3/4 cents per bushel and December soybean meal is down $12.40. 
The Dow Jones Industrial Average is down 472.08 points.

LIVE CATTLE:

   The live cattle contracts aren't seeing any support in their marketplace 
heading into Tuesday's afternoon. Yes, Friday's market was able to close 
higher, but largely last week's lower tone unraveled some of the market's 
confidence. Having the Fourth of July weekend behind us now, everyone wants to 
know what July's market is going to bring? How will beef demand fare? Will 
processing speeds continue to run 660,000 head per week, or will speeds regress 
and showlists grow? The biggest theme in Tuesday's market is that it seems like 
there's more unanswered questions at this point than answered questions. August 
live cattle are down $0.82 at $133.77, October live cattle are down $0.62 at 
$139.35 and December live cattle are down $0.77 at $145.00. This week's 
showlist is mixed as there's less cattle in Texas and Kansas, but more cattle 
in Nebraska and Colorado. Thus far the market's not seen any real interest 
develop other than that there's a bid in Nebraska being offered at $145 and 
asking prices in the Southern Plains are noted at $140 plus.

   Boxed beef prices are higher: choice up $0.35 ($264.17) and select up $0.23 
($240.70) with a movement of 35 loads (24.08 loads of choice, 4.10 loads of 
select, zero loads of trim and 6.35 loads of ground beef).

FEEDER CATTLE:

   On a normal day, one would suspect that the feeder cattle contracts would be 
rallying as the corn market tumbles $0.25 to $0.33 lower to start the week off. 
But, as the entire commodity market faints lower, even the feeder cattle 
contracts are trading lower despite the corn market's plumet. August feeders 
are down $0.80 at $173.70, September feeders are down $0.62 at $177.02 and 
October feeders are down $0.65 at $179.85.

LEAN HOGS:

   The lean hog complex is seeing more support grow for the nearby contracts of 
July and August, but the deferred months are trending lower like the rest of 
the marketplace. July lean hogs are up $2.05 at $111.65, August lean hogs are 
up $2.75 at $105.72 and October lean hogs are down $0.10 at $88.82. Seeing a 
wild jump in midday pork cutout values may not end up amounting to much by the 
day's end as anything can happen, but in the meantime a $8.28 advancement 
demands some attention.

   The projected lean hog index for July 1 is down $0.12 at $110.58, and the 
actual index for June 30 is down $0.14 at $110.70. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $0.63 with a weighted average of $113.88, 
ranging from $110.00 to $124.00 on 4,150 head and a five-day rolling average of 
$116.23. Pork cutouts total 163.81 loads with 136.16 loads of pork cuts and 
27.64 loads of trim. Pork cutout values: up $8.28, $117.03.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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