DTN Midday Livestock Comments

GENERAL COMMENTS:

Firm gains have redeveloped through hog futures trade at midday, despite the overall lack of support in morning cash reports. Live cattle futures remain mixed in light trade with the focus on end of the week position taking. Corn prices are higher in light trade. March corn futures are 4 cents higher. Stock markets are higher in light trade. The Dow Jones is 94 points higher while Nasdaq is up 19 point.

LIVE CATTLE:

Live cattle futures are mixed in narrow trading ranges through all 2017 contract months. Prices range from 37 cents per cwt lower to 30 cents higher. Overall trade volume has slowed significantly at the end of the week with traders still concerned about the recent pressure in beef values and lack of active cash trade. Moderate trading ranges are likely to be seen through the rest of the session which could bring price swings through the end of the day. Cash cattle trade is dead quiet through the morning, with no bids redeveloping across any areas at this point. It appears that trade is done for the week, although numbers remain lighter than one would expect are needed to fill next week's needs, especially in the North. But light trade has been able to be done previously and packers seem to remain extremely guarded with buying activity given the pressure in beef values. Beef cut-outs at midday are mixed, $0.74 higher (select) and down $0.67 per cwt (choice) with light movement of 79 total loads reported (40 loads of choice cuts, 19 loads of select cuts, 9 load of trimmings, 11 loads of ground beef).

FEEDER CATTLE:

Light gains are holding a midday in nearby contracts with prices 7 to 20 cents per cwt higher. The mixed trade seen in live cattle futures while very little fundamental market direction is seen is helping to bring stability to the market. The firm gains in corn futures through the morning has limited longer term buyer support and could bring additional uncertainty to the complex through the end of the week.

LEAN HOGS:

Moderate gains have redeveloped through lean hog futures at midday as buyer support is firmly planted in all nearby contracts following firm pork values and the expectation that additional support may develop before the end of the trading session. Front month futures are holding a 60 cent per cwt gain, while April and May contracts are trading 70 to 75 cents per cwt higher at midday. Firm support is expected to hold through the rest of the session, although overall volume is likely to remain light. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.08 at $69.97 per cwt with the range from $66.00 to $69.97 on 2,250 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 132 loads selling with prices up $0.36 per cwt. Lean hog index for 2/8 is at $72.80 up $0.61 with a projected two-day index of $73.51 up $0.71.

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

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