DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures have fallen under pressure at midday with moderate losses developing in both live cattle and lean hog futures. The lack of buyer support across the market continues to be the main focus of the recent pressure. 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 81 points higher while Nasdaq is up 19 points.

LIVE CATTLE:

Live cattle futures have pushed lower at midday following early support in the complex. The inability to hold onto support seen early in the session and driven by the triple digit gains Tuesday is causing some uncertainty through the market. There may be some increased price shifts through the end of the session, but overall pressure may continue to hold based on lack of buyer support in the market. Cash cattle trade has been limited to the Fed Cattle Exchange, although a few feedlot bids are surfacing through the morning at $116 per cwt. The Fed Cattle Exchange Auction report today listed a total of 4,822 head, with only 1,556 actually sold, and 3,266 head listed as unsold. The state by state breakdown looks like this: KS 620 head at $118.50-$119.25; NE no test: TX 321 head, at $119.25; CO no test; IA 154 head at $116.75; other states (OK, ND) 461 head at $118.50-$123.33. The weighted average was $119.04, up from last week's weighted average of $117.60. Beef cut-outs at midday are lower, $0.53 lower (select) and down $0.43 per cwt (choice) with moderate movement of 99 total loads reported (56 loads of choice cuts, 18 loads of select cuts, 6 loads of trimmings, 19 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are still holding light to moderate gains despite the pressure developing through the rest of the livestock complex at midday. Overall lack of trade activity is the main focus of most futures markets in the livestock arena at this point, but nearby feeder cattle futures are still able to fight off selling pressure. March futures are holding a 22 cent gain, following the firm support in April contracts. But beyond the nearby trade, traders seem to be heavily influenced by strong pressure in live cattle markets.

LEAN HOGS:

Buyer support has run out of gas through midmorning with early gains seen through the complex eroding as the day continues. Nearby contracts are now holding losses of 5 to 35 cents per cwt, although overall trade volume remains extremely light. Trade is expected to remain in the current range through the end of the session, although the focus on covering positions following Tuesdays gains seems to be the main focus of most traders. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.74 at $71.59 per cwt with the range from $66.00 to $74.00 on 6,086 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 up $1.19 per cwt. Lean hog index for 2/10 is at $74.11 up $0.60 with a projected two-day index of $74.62 up $0.51.

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

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