DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures are holding trade activity in a narrow range Tuesday morning despite the firm buyer interest developing in nearby cattle futures. The outside market commodity support is helping to bring spill over buying to nearby cattle trade. Corn prices are lower in light trade. March corn futures are 6 cents lower. Stock markets are lower in light trade. The Dow Jones is 45 points lower while Nasdaq is down 28 points.

LIVE CATTLE:

Firm buyer support continues to hold in nearby live cattle futures trade as the underlying support from outside commodity markets is helping to draw unified buyer support to the complex. This is pushing front month futures contracts 80 cents higher with prices starting to be established above $119 per cwt. The potential exists to draw additional support back to the complex, but there is likely needed to be firming support from fundamentals. Cash cattle markets are quiet with no bids developing yet this week, and asking prices generally quiet. A few asking prices have been suggested at $122 in the South and $192 in the North, but it is likely going to be the second half of the week before active trade develops. Overall show lists have become generally smaller through the week, putting more emphasis on tight supplies. Beef cut-outs at midday are mixed, $0.29 lower (select) and up $0.38 per cwt (choice) with light movement of 52 total loads reported (31 loads of choice cuts, 13 loads of select cuts, no loads of trimmings, 8 loads of ground beef).

FEEDER CATTLE:

Mixed trade is seen in feeder cattle futures with traders focusing on the overall lack of buyer support seen during the morning. There continues to be growing uneasiness concerning the wide ranging gains in commodity markets as well as increased overall concern that trade interest may slow through the end of the month. The lack of consistency in beef values in the morning report has added even more uncertainty to deferred feeder cattle trade. Moderate gains of 60 to 80 cents are holding in spring contracts, while fall contracts are holding narrow losses Tuesday morning.

LEAN HOGS:

Little movement has been seen through the entire lean hog complex with prices once again mixed at midday. Narrow price shifts have developed through the morning, but the inability to break out of the tightly grouped trading ranges has limited overall activity levels and the interest of most buyers to step back into the market. There may be some additional support seen through the next couple of weeks as more focus is placed on overall hog numbers available to the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.25 at $61.71 per cwt with the range from $58.00 to $63.00 on 4,743 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.07 at $62.84 per cwt with the range from $58.00 to $63.00 on 2,453 head reported sold. The National Pork Plant Report reported 168 loads selling with prices falling $1.70 per cwt. Lean hog index for 1/13 is at $64.10 up $1.18 with a projected two-day index of $64.84 up $0.74.

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

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