DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures are trading mixed in a narrow range in the cattle complex as very limited activity is seen in both live cattle and feeder cattle markets. Active end of the week short covering is exploding in nearby lean hog futures at midday which has helped to establish triple-digit gains in nearby contracts. Corn prices are higher in light trade. December corn futures are 1/4 cent higher. Stock markets are higher in light trade. The Dow Jones is 46 points higher while Nasdaq is up 18 points.

LIVE CATTLE:

Live cattle futures are mixed in light trade with nearby contracts holding narrow gains at midday, while sluggish pressure is holding in deferred futures. The overall lack of support across the complex remains the focus of the entire cattle market Friday with most traders expected to remain on the sidelines until early next week. Cash cattle trade continues to hold out midday Friday with bids remaining at $102 to $105 live basis and $165 to $167 dressed basis. At this point both side is willing to budge with asking prices solidly planted at $108 live basis and $170 to $172 dressed basis. The need for packers to gain access to cattle before heading home for the weekend will cause one side or the other to move before the end of the day. At this point it is expected that prices will remain steady to higher, but at what level and how active trade will be is still uncertain. Beef cut-outs at midday are mixed, $0.72 lower (select) and up $0.59 per cwt (choice) with light movement of 72 total loads reported (37 loads of choice cuts, 15 loads of select cuts, 7 loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have posted moderate to strong gains at midday with front month futures holding a 80 cent gain based on end of week buyer support. Extremely sluggish market interest has been seen through the entire morning which kept prices shifting higher and lower based on lack of overall market direction at the end of the week. Trade may continue to step into nearby contracts over the end of the session but could remain sluggish based on limited trade volume.

LEAN HOGS:

Sharp gains have quickly developed through lean hog futures trade as short covering activity has developed Friday. October lean hog futures have surged above $60 per cwt with contracts posting a $1.90 per cwt rally at midday. All nearby contracts are holding triple-digit gains although volume remains generally light. The tone of the market remains firm, as traders focus on adjusting end of the week positions following the volatile week of trade. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.61 at $52.14 per cwt with the range from $49.00 to $53.50 on 2,140 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $2.55 at $51.30 per cwt with the range from $49.00 to $53.50 on 100 head reported sold. The National Pork Plant Report reported 140 loads selling with prices adding $1.05 per cwt. Lean hog index for 9/13 is at $65.15 down $1.22 with a projected two-day index of $64.07, down 1.08.

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

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