DTN Midday Livestock Comments

Cattle Futures Tumble Lower

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

Sharp losses in live cattle trade and feeder cattle markets have focused increased market direction as traders take into account pressure in beef values. Hog markets are mixed as early support is eroding in late week positioning. Corn markets are higher in light trade. March corn futures are 2 cents higher. Stock markets are higher in light trade. Dow Jones is 825 points higher with Nasdaq up 286 points.

LIVE CATTLE:

Triple-digit losses have quickly moved into nearby live cattle trade with February through June contracts holding $1 to $1.30 per cwt losses. This lack of support is a combination of sharp triple-digit losses in feeder cattle trade, while beef values have softened in the cutout report. The concern that beef demand may slowly erode through January due to outside market pressure is causing widespread weakness through the futures trade. Cash cattle trade is developing in the North on a dressed basis with prices at $193 to $195 per cwt with most sales at $195 per cwt. These prices are fully steady with last week, and continue to focus on steady trade after live cattle sales Thursday. Live bids are seen at $122 to $123 per cwt, which could create some additional clean up trade before the end of the day. At this point, prices seem to have been set. Boxed Beef cut-outs at midday are lower, $1.56 lower (select) and down $1.64 per cwt (choice) with light movement of 70 total loads reported (44 loads of choice cuts, 11 loads of select cuts, no loads of trimmings, 15 loads of ground beef).

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Sharp triple-digit losses have continued to develop in feeder cattle trade with traders focusing on firm support in the grain complex, which is sparking additional underlying concerns about overall production costs. With cattle numbers expected to remain strong through most of the spring, more focus will be placed on feed costs in 2019. This is directly affecting feeder cattle prices on the futures complex, as traders are uncertain of additional support in the live complex.

LEAN HOGS:

Early support in lean hog futures has eroded during morning trade with spot February contracts holding steady prices at midday, while other nearby contracts are trading moderately lower. End-of-week market positioning has pushed prices lower as traders adjust from the strong market rally seen over the last week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.06 at $47.37 per cwt with the range from $45.50 to $47.64 on 3,930 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $2.52 at $46.19 per cwt with the range from $45.50 to $47.00 on 438 head reported sold. Pork carcass values are higher on the morning report with prices gaining $1.05 per cwt at $70.95 per cwt with 229 loads traded. Lean hog index for 1/02 is $53.25, up 0.17, with a projected two-day index is $53.63, up 0.38.

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

(CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment