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DTN Midday Livestock Comments          11/20 11:59

   Live Cattle Contracts Mixed in Sluggish Trade 

   Triple digit losses continue to hold in both lean hog and feeder cattle 
futures, although all contracts have bounced off of session lows as light end 
of the day support is starting to trickle into the complex. Live cattle futures 
are being driven by moderate longer term support developing in deferred 
contract prices. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Livestock futures remain mixed with moderate to strong pressure in the lean 
hog and feeder cattle futures. Live cattle futures are mixed as moderate to 
strong buyer support has trickled into deferred live cattle futures despite the 
lack of active volume and inability to spark cash cattle trade at this point. 
Corn prices are higher in light trade. December corn futures are 7 cents per 
bushel lower. Stock markets are higher in light trade. The Dow Jones is 8 
points higher while Nasdaq is up 23 points.

   LIVE CATTLE:

   Mixed trade is seen in the live cattle futures market with nearby December 
and February contracts holding light pressure due to the weakness through the 
rest of the livestock market. Gains have developed in deferred live cattle 
futures trade. This is helping to firm longer term support in the complex, 
although trade volume remains light. Cash cattle markets are still untraded, 
and likely to push active trade off until Friday and potentially after the 
release of the cattle on feed report Friday afternoon at 2 pm. A few bids have 
developed through the morning Thursday at $167 to $168 in the South and $263 in 
the North. With bids still below steady money it is unlikely that packers will 
gain much interest at this point. Asking prices are holding at $174 in the 
South and $270 and higher in the North. Beef cut-outs at midday are higher, 
$1.58 higher (select) and up $0.84 per cwt (choice) with moderate movement of 
72 total loads reported (42 loads of choice cuts, 12 loads of select cuts, five 
loads of trimmings, 12 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures are under significant pressure with the strongest 
losses seen in early 2015 contracts. Traders appear to be starting to adjust to 
expectations of the cattle on feed report which will be released Friday. 
Although estimates point toward a light decrease in placed cattle in the month 
of October, traders may be taking additional protection at this point, allowing 
for losses over $2 per cwt to be seen in the April and May contract months. 

   LEAN HOGS:

   Even though nearby contracts continue to remain under pressure with 
triple-digit losses holding at midday, light buyer support is starting to swell 
up in deferred contracts, which could minimize early morning pressure across 
the complex. Even nearby contracts are well off of session lows which is 
keeping buyers focused on the potential that current demand fears have been 
adequately met by the pullback in price levels. Trade volume over the next 
couple of weeks is expected to remain sluggish, which may limit overall market 
direction, but could spark wide price shifts through the complex. Cash prices 
are lower on the National Direct morning cash hog report. The weighted average 
price fell $1.50 per cwt to $84.14 per cwt with the range from $83.85 to $86.50 
per cwt on 2,870 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa Minnesota Direct morning cash hog report. The 
National Pork Plant Report is reported 190 loads selling as prices gained $0.49 
per cwt. Lean hog index for 11/18 is at $88.75 up $0.62, with a projected 
two-day index of $88.95 up 0.20.

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


(SK)

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