DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures are contained in a narrow to moderate trading range at midday following a pullback from strong early gains in feeder cattle and lean hog futures. Both live cattle and lean hog futures are mixed as traders are posting price levels on either side of unchanged. Most contracts are contained to single digit price ranges. The inability to place additional commercial buyer interest in firm beef and pork values is limiting follow through support. Corn prices are lower in light trade. March corn futures are 2 cents lower. Stock markets are lower in light trade. The Dow Jones is 76 points lower while Nasdaq is down 38 points.

LIVE CATTLE:

Live cattle trade remains mixed to mostly lower at the end of the morning with traders concerned about the ability to bring additional support back into the market. Strong support in beef values may help to bring buyers back into the market through the end of the session, although prices are not expected to deviate significantly from unchanged values with all nearby futures hovering in a single digit trading range. Uncertainty as to how committed commercial traders are to the recent market support could quickly limit buyer activity in the near future. Cash cattle markets are quiet early Monday with traders focusing on overall lack of movement on both sides this early in the week. Firming cash markets last week which developed on Wednesday and Thursday may help to spark additional interest as the week continues, but at this point, asking prices and bids are still hard to pin down. Beef cut-outs at midday are higher, $1.29 higher (select) and up $1.96 per cwt (choice) with light movement of 87 total loads reported (53 loads of choice cuts, 9 loads of select cuts, 10 loads of trimmings, 14 loads of ground beef).

FEEDER CATTLE:

Despite choppy market movement seen through the entire morning, light to moderate buyer support is slowly developing in feeder cattle trade. Midday gains are holding from 30 to 55 cents per cwt, although the overall tone of the market remains sluggish with concern surrounding the pressure seen across other livestock trade. The inability for renewed buyer interest to develop in live cattle trade Monday could quickly erode any substantial support in feeder cattle as the week continues. Currently March futures are holding a 32 cent gain, trading at $124.55 per cwt.

LEAN HOGS:

Early buyer support which quickly moved back into the lean hog futures has evaporated at midday. This lack of support continues to put more pressure on the entire complex as cash markets shifted lower once again despite strong pork value support Monday morning. The lean hog futures is mixed within a very narrow trading range, moving from 17 cents lower to 17 cents higher. This break from the firm gains early in the session shows the overall lack of depth in the market, and is opening the door for follow through liquidation through the end of the session Monday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.49 at $66.88 per cwt with the range from $61.00 to $68.50 on 3,865 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.30 at $67.77 per cwt with the range from $61.00 to $68.50 on 1,890 head reported sold. The National Pork Plant Report reported 144 loads selling with prices adding $1.92 per cwt. Lean hog index for 3/2 is at $73.38 down $0.63 with a projected two-day index of $72.92 down $0.46.

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

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