DTN Midday Livestock Comments

Widespread Losses Develop Tuesday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Russ Quinn)

Livestock futures have posted aggressive market losses in both cattle and hog futures. The stability seen Monday has quickly eroded with follow through pressure which has been so evident through early November has sparked increased liquidation in all contract months. Corn prices are lower in light trade. December corn futures are 4 cents per bushel lower. Stock markets are lower in light trade. The Dow Jones is 67 points lower while Nasdaq is down 43 points.


Losses have quickly swept through the livestock market Tuesday morning with nearby pressure in live cattle trade focusing on the aggressive losses that has quickly moved into the feeder cattle markets. Losses are seen from 80 cents per cwt in April 2018 contracts to $1.70 per cwt losses in summer 2018 contract months. The focus on additional market pressure likely to develop through the remainder of November in front of Thanksgiving weekend is likely to spark even more uncertainty across live cattle trade. Cash cattle activity remains quiet with bids undeveloped at this point and likely will be generally subdued until the last half of the week. A few asking prices are starting to float around in areas of the South at $124 per cwt It is not expected that trade will develop until the second half of the week, and potentially late in the week. Beef cut-outs at midday are mixed, $0.23 higher (select) and down $1.68 per cwt (choice) with moderate movement of 66 total loads reported (30 loads of choice cuts, 23 loads of select cuts, no loads of trimmings, 13 loads of ground beef).


Widespread pressure has quickly developed across the feeder cattle as nearby and deferred contracts have quickly tumbled lower through morning trade. All but front month November futures are now holding losses above $2 per cwt as traders remain focused on the overall lack of support in all livestock trade. This is adding increased pressure to the entire cattle market with increased softness likely to develop through the upcoming days and weeks.


The stability and lack of overall direction seen Monday quickly led to aggressive market liquidation through Tuesday morning. Aggressive triple digit losses have quickly swept through the complex with nearby contracts trading from $1.50 to $2.20 per cwt lower at midday. This is likely to create additional liquidation with traders focusing on additional longer term market support through the next couple of weeks. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.50 at $58.43 per cwt with the range from $56.50 to $58.57 on 5,612 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 177 loads selling with cutout values increasing $0.04 per cwt. Lean hog index for 11/10 is at $67.00 down $0.47 with a projected two-day index of $66.68, down $0.32.

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


Rick Kment