DTN Closing Livestock Comments

GENERAL COMMENTS

Cash cattle activity remains sluggish Monday afternoon with bids and asking prices still undeveloped. It is likely that cash market interest may not become active until midweek or later. Although cash market trade remained sluggish last week, formulated sales increased. Generally, show lists seen Monday are mixed to mostly larger than the previous week. According to the closing report, the national hog base is $1.80 higher compared with the Prior Day settlement ($43.00 to $54.00) weighted average $50.59. Corn futures are lower in light activity. September futures were 3 3/4 cents lower Monday. Dow Jones Index is 98 points lower with Nasdaq down 104 points.

LIVE CATTLE

Live cattle futures closed mostly higher after early morning pressure ($0.37 Lower to $0.40 Higher). Limited trade was seen through the entire complex as traders seem e content with the market surge seen Friday and willing to allow prices to hover in this higher trading range. There was little to no additional technical or fundamental direction with front month October futures leading the market lower with a 37-cent loss. All other nearby contracts traded 2 to 40 cents per cwt higher with increased long-term focus on the ability to advance beef prices. Beef cut-outs: higher, $0.91 higher (select, $197.38) and up $1.77 (choice, $206.04) with good demand and light offerings (49 loads of choice cuts, 23 loads of select cuts, nine loads of trimmings, eight loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady. Bids and asking prices are still undeveloped, leaving active trade to likely develop in the last half of the week.

FEEDER CATTLE:

Strong triple-digit gains develop late in the week ($0.37 lower to $0.70 Higher). Sharp gains seen Friday have allowed for market apathy following a combination of position taking and follow through buying to trickle into the market. Overall volume remains sluggish, allowing for additional firmness in early 2016 contract months. The focus on sparking additional activity through the end of the year and early 2019 is split between firm support in live cattle trade and follow through pressure in grain trade. CME cash feeder index for 9/14 is $152.71 up $0.11.

LEAN HOGS:

Strong pressure developed across lean hog futures, allowing for increased overall pressure in most contracts (1.52 lower to $0.22 higher). Sharp triple-digit losses flooded into December and February contracts with increased pressure seen through the rest of the complex. Although the aggressive pressure of $2.50 per cwt seen early in the morning Monday did not hold through the rest of the session, traders focused on the overall lack of buyer interest in the market early in the week. This is creating additional market pressure through the entire market, as prices are coming off short-term highs set last week. This could shift the lean hog futures into a short-term sideways trend, with price ranges generally wide. Strong market support developed in pork cutout values following triple digit gains in all primals except Loin and Butts. Pork cutout values gained $1.49 per cwt, moving to $76.02 per cwt. CME cash lean index for 9/13 $51.85 up $1.77. DTN Projected lean index for 9/14 $53.48 up $1.63.

TUESDAY'S CASH HOG CALL:

Mixed. Limited trade direction is expected to be seen over the next couple of days. Bids are expected $1 lower to $1 Higher, although most bids are expected steady. Tuesday runs are currently estimated at 418,000 head.

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

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