DTN Midday Livestock Comments

GENERAL COMMENTS:

Sharp gains have quickly developed in lean hog futures trade with markets focusing on the quickly and aggressively moving back into the market over the last week. These triple-digit gains could set up additional buyer activity during early October. Cattle futures are mixed to moderately lower as traders try to make final end of the month and quarter adjustments following the volatile market shift seen over the last couple of weeks. Corn prices are lower in light trade. December corn futures are 2 cents lower. Stock markets are mixed in light trade. The Dow Jones is 4 points lower while Nasdaq is up 40 points.

LIVE CATTLE:

Live cattle futures are mixed in a narrow trading range Friday morning with nearby contracts focusing on the overall lack of direction in beef values over the last couple of days while the support in cash cattle trade seems to be able to keep nearby traders slightly optimistic. The pressure seen in feeder cattle trade during late morning has had an impact on deferred live cattle contracts as traders look for increased overall market direction for the entire complex. Sluggish trade activity and light volume is expected to be seen through the next couple of hours as traders focus on market adjustments through the end of the month. Cash cattle activity has started to develop Friday morning in the North with light dressed trade taking place at $172 per cwt. This is steady with Thursday's trade that was seen through the last half of the day, but $1 to $2 per cwt higher than last week's levels. Bids are seen in the North at $108 per cwt live basis although no bids have redeveloped in the south at this time. Asking prices remain unchanged at $110 to $112 in the South and $173 to $175 in the North. Beef cut-outs at midday are mixed, $0.15 lower (select) and up $0.31 per cwt (choice) with moderate movement of 79 total loads reported (49 loads of choice cuts, 13 loads of select cuts, no loads of trimmings, 17 loads of ground beef).

FEEDER CATTLE:

Early mixed trade has continued to lack underlying buyer support through the end of the week with prices not seen 50 cents to $1.50 per cwt lower as traders try to make final end of the month and quarter adjustments prior to market close. October and November futures remain lightly traded with 30 to 50 cent losses at midday, while triple digit losses have quickly moved into the deferred contracts. No major change developed across the cattle market Friday, but the overall light volume is keeping the market vulnerable through the end of the week and month.

LEAN HOGS:

Lean hog futures have quickly turned higher Friday as traders are now focusing on the slightly bullish results from Thursday's hogs and pigs report. The overall lack of follow through pressure that started to develop in the first hour of trade has allowed for aggressive triple-digit gains to flood the market. December through April futures are holding gains of $2 to $2.70 per cwt at midday. Even though nearby contracts are nearing the daily trading limit of $3 per cwt, it appears that current support to hit this level may be short. This rally focused on a $4 per cwt gain over the last week, changing the overall course of the market with December contracts breaking through short term resistance levels. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.35 at $46.86 per cwt with the range from $42.00 to $48.00 on 2,170 head reported sold. Cash prices are not reported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report reported 116 loads selling with prices gaining $2.43 per cwt. Lean hog index for 9/25 is at $56.98 down $0.68 with a projected two-day index of $56.25, down 0.73.

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

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