DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures have turned steadily lower through the morning with active pressure seen in nearly all contracts. The significant switch from firm buyer support in lean hog futures to strong late morning losses continues to create longer term market concerns. Corn prices are higher in light trade. March corn futures are 1 cent higher. Stock markets are higher in light trade. The Dow Jones is 123 points higher while Nasdaq is up 43 point.

LIVE CATTLE:

Live cattle futures are holding narrow losses in light trade in nearby futures contracts, while deferred contracts remain sharply lower, holding losses of 70 cents to $1.35 per cwt at midday. The overall lack of direction in the grain market and follow-through pressure seen in cattle trade after sharp losses late last week is limiting any potential of market stability at this point. Cash cattle activity is quiet with show lists larger in all areas. There is likely to be very little direction in either bids or asking prices through the day which may be moved back until later in the week. Beef cut-outs at midday are higher, $1.39 higher (select) and up $0.51 per cwt (choice) with light movement of 71 total loads reported (38 loads of choice cuts, 12 loads of select cuts, 10 load of trimmings, 11 loads of ground beef).

FEEDER CATTLE:

Moderate pressure has been seen in all cattle markets Monday morning as early softness is allowing for market pressure in feeder cattle trade. Front month March futures have moved back from early pressure, currently trading unchanged, while the most significant pressure is seen in deferred contract months. The overall lack of buyer activity continues to be limiting any stability other than in nearby trade as traders are looking for additional support from the live cattle market.

LEAN HOGS:

Early support in lean hog futures has quickly eroded through the morning Monday with front month February futures able to hang onto light support as prices are trading 30 cents higher at midday. But the rest of the complex remains under firm pressure. Even though prices have backed away from earlier triple-digit losses seen across the complex, the weakness in the market cannot be overlooked. This is creating some widespread market uncertainty as fundamentals still remain strong. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.92 at $69.80 per cwt with the range from $66.00 to $72.50 on 3,651 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.64 at $70.55 per cwt with the range from $66.00 to $72.50 on 235 head reported sold. The National Pork Plant Report reported 109 loads selling with prices up $0.58 per cwt. Lean hog index for 2/9 is at $73.51 up $0.71 with a projected two-day index of $74.11 up $0.60.

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

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