DTN Midday Livestock Comments

GENERAL COMMENTS:

Strong gains are seen in live cattle and lean hog futures trade as commercial buying support has remained active through the entire complex. This may continue to draw increased support into the market through the afternoon, although volume may not increase significantly before closing bell. Corn prices are higher in light trade. March corn futures are 2 cents higher. Stock markets are higher in light trade. The Dow Jones is 20 points higher while Nasdaq is up 8 points.

LIVE CATTLE:

Live cattle futures remain firmly higher with renewed support developing across the complex. This has pushed front-month contracts $1.15 per cwt higher with the overall support based on firming commercial buying moving back into the market. Cash cattle activity is starting to slowly develop with a few bids seen in the South at $116 per cwt. This may continue to limit the trade activity with feeders likely remaining content at this point to see if additional support develops later in the week. Beef cut-outs at midday are mixed, $0.71 lower (select) and up $0.12 per cwt (choice) with light movement of 50 total loads reported (29 loads of choice cuts, 16 loads of select cuts, no loads of trimmings, 6 loads of ground beef).

FEEDER CATTLE:

Early support is slowing slightly, especially in deferred contracts. The feeder cattle futures remain mixed at midday with firm support from live cattle trade helping to hold nearby traders in the market. Nearby futures are holding gains from 60 to 80 cents per cwt, while lack of interest is seen in late 2017 contract months due more to market inactivity than any other factor.

LEAN HOGS:

Firm buyer support continues to hold in nearby lean hog futures with trade posting a $1.32 per cwt rally. The underlying support in the complex continues to push all contracts higher Tuesday as traders focus on underlying fundamental support. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.78 at $66.81 per cwt with the range from $63.00 to $70.50 on 3,983 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 184 loads selling with prices gaining $0.92 per cwt. Lean hog index for 2/3 is at $70.95 up $0.65 with a projected two-day index of $71.45 up $0.50.

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

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