DTN Midday Livestock Comments

General Comments

Moderate to strong pressure is seen through livestock trade with triple-digit losses holding in cattle and hog trade. The strong pressure in December live cattle futures through the morning is weakening the entire complex. Corn markets are lower in light to moderate trade. December corn futures are 4 cents lower. Stock markets are lower in light trade. The Dow Jones is 200 points lower while Nasdaq is down 135 points.

LIVE CATTLE:

Live cattle futures have posted strong triple-digit losses Friday morning. Although markets have slowly pulled back from session lows, nearby contracts are holding losses near $1.75 per cwt with very light activity now seen in the market. Traders are likely to focus on the current pressure heading into the weekend break, with very light activity seen on Monday due to Veterans Day holiday, although markets will remain open on a normal schedule. Cash cattle trade has started to develop in Nebraska with live bids seen at $113 per cwt while dressed bids are seen at $179 to $180 per cwt. This is generally $1 to $2 per cwt lower than last week's price levels and may be enough activity to set the tone of the week. Bids in the South are seen at $114 per cwt. Asking prices still remain at $118 live and $185 dressed for cattle still left on show lists. Boxed Beef cut-outs at midday are lower, $0.28 lower (select) and down $0.08 per cwt (choice) with light movement of 71 total loads reported (45 loads of choice cuts, 6 loads of select cuts, 5 loads of trimmings, 15 loads of ground beef).

FEEDER CATTLE:

Strong triple digit losses have been seen in all but front month November contracts. November feeder cattle futures are trading just under $150 per cwt with prices at $149.75 per cwt. Most of the pressure has been contained in January and March futures with losses nearing $1.50 per cwt in both contract months. The concern that firming grain markets will have a longer term impact on overall production costs. Trade volume has remained active through most of the morning, although very limited movement is expected through the rest of the trading session.

LEAN HOGS:

Narrow losses are seen in nearby lean hog futures, as traders seem to be focusing on fundamental stability in December and February contracts. Pressure has redeveloped in spring and summer contracts with losses expanding to $1 per cwt. The concern that overall pork demand may be hampered through early 2019 has started to erode the previous premium seen in the complex. Trade volume remains light in most contracts, allowing for prices to likely wander in the current trading range. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 223 loads selling on the morning report. Pork carcass values fell $1.09 per cwt at $70.48 per cwt. Lean hog index for 11/7 is at $63.38 down 0.34 with a projected two-day index of 62.77, down 0.61.

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

(CZ)

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