DTN Midday Livestock Comments

GENERAL COMMENTS:

Cattle futures have pulled back from strong early gains as traders seem to have run out of gas through the last half of the trading session. The pullback continues to be driven by the mixed trade levels seen in feeder cattle markets. Hog futures have gained strong support through late Wednesday morning with front-month April contracts holding gains nearing $1 per cwt. Corn prices are higher in light trade. March corn futures are 6 cents lower. Stock markets are higher in light trade. The Dow Jones is 319 points lower while Nasdaq is up 76 points.

LIVE CATTLE:

Despite strong gains in boxed beef values through the morning Wednesday and firming cash cattle trade on the Fed Cattle Exchange Auction, traders have quickly backed away from strong market support Wednesday morning. This has limited April futures to a 22-cent-per-cwt gain, while June through December contracts are holding 60- to 75-cent gains at midday. Trade activity outside of front-month contracts remains extremely limited, and could bring some stability to overall price levels over the next couple of hours. Cash cattle markets are becoming more active with feedlot bids developing through the morning Wednesday. This follows the Fed Cattle Exchange Auction. Bids are seen at $125 live basis, and $196 dressed with asking prices at $128 and higher in the South and $200 and higher in the North. The Fed Cattle Exchange Auction report today listed a total of 4,813 head, with 2,855 actually sold, and 1,958 head listed as unsold. The state-by-state breakdown looks like this: KS 754 head at $125.00-$125.25; NE 1,462 head at $125.00-$125.25; TX 639 head, at $123.50-$125.50; CO no test; IA no test; other states no test. The weighted average was $124.99, up from last week's weighted average of $122.10. Beef cut-outs at midday are higher, $1.25 higher (select) and up $2.02 per cwt (choice) with light movement of 78 total loads reported (37 loads of choice cuts, 19 loads of select cuts, 5 loads of trimmings, 16 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have given back morning support with contracts trading mixed from 15 cents per cwt lower to 32 cents higher. The overall recent support continues to hold buyer support into the complex even though the grip is slipping through the session. Trade may become more volatile through the rest of the session and could lead to choppy mixed trade during the entire remainder of the week.

LEAN HOGS:

Moderate to strong gains have quickly redeveloped through lean hog futures with front-month April futures gaining $1.15 per cwt. There continues to be additional buyer support developing across the market. The firm support in front-month futures has sparked increased market support in all nearby and deferred trade. It is uncertain at this point just how much additional long-term support will develop through early March. But the potential to bring some needed stability into cash markets may bring aggressive commercial buyer support back to futures trade. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.07 at $67.18 per cwt with the range from $61.00 to $69.00 on 5,871 head reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price added $0.60 at $68.69 per cwt with the range from $62.00 to $69.00 on 2,896 head reported sold. The National Pork Plant Report reported 236 loads selling with prices fell $0.67 per cwt. Lean hog index for 2/27 is at $75.89 down $0.83 with a projected two-day index of $74.77 down $1.12.

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

(ES)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.