DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures remain mixed at midday. Light pressure in cattle trade continues to focus on the uncertainty of long term support and ability for traders to become actively involved in the market at this level. The firm support in beef values helped to pull prices slightly off of session lows, but has had limited impact. Hog trade remains firm with buyer support quickly stepping back into the market at midday. Early trade remained sluggish, but trader activity quickly developed following morning reports were released. Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are lower in light trade. The Dow Jones is 20 points lower while Nasdaq is down 7 points.

LIVE CATTLE:

Lackluster market activity has defined the Tuesday trading session with prices holding narrow losses at midday. Market movement has remained choppy through much of the morning, although price shifts on either end of the spectrum have been unable to hold significantly and are indicating that most commercial traders are extremely cautious about stepping back into the market. Nearby futures are currently holding losses of 10 to 30 cents per cwt. The firm support in beef values seems to be having a very limited impact on trade interest. Cash cattle activity remains dead silent with bids and asking prices essentially undeveloped through the morning Tuesday. The expectation that asking prices will be seen around $128 in the South and $202 in the North will continue to keep the bar elevated given the strong premium to the futures trade. Beef cut-outs at midday are higher, $0.31 higher (select) and up $2.35 per cwt (choice) with light movement of 72 total loads reported (34 loads of choice cuts, 17 loads of select cuts, 6 loads of trimmings, 15 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures remain mixed in a narrow range with prices hovering on either side of unchanged. Trading ranges are limited to 20 cents lower to 10 cents higher at midday as the pressure in grain markets is being tempered by the potential of firmness across the cattle complex and firming beef values. The outlook of the market continues to focus on strong domestic support for beef through the summer months, but this is limiting the ability to bring underlying commercial interest back into feeder cattle trade.

LEAN HOGS:

Lackluster market activity seen through the morning has been replaced by moderate to firm buyer support across all nearby contracts. Nearby trade is holding gains of 55 to 70 cents per cwt following the firmness seen in pork values. This is helping to create additional commercial buyer confidence to step back into the market. The softness and lack of commitment in cattle trade is also adding to some crossover spreading activity which appears to be developing through early week trade. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.20 at $66.12 per cwt with the range from $65.00 to $69.25 on 3,068 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.43 at $67.80 per cwt with the range from $65.00 to $69.25 on 295 head reported sold. The National Pork Plant Report reported 197 loads selling with prices adding $0.81 per cwt. Lean hog index for 3/3 is at $72.92 down $0.46 with a projected two-day index of $72.69 down $0.23.

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

(ES)

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