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DTN Midday Livestock Comments          09/26 11:57

   Cattle Futures Hold Swift Losses Monday 

   Active pressure develops quickly Monday morning across the cattle complex as 
sellers turn the focus to increased placements and pressure in last week's cash 
cattle trade. Lean hog futures are trading lower, but remain range bound. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Strong pressure continues to hold across cattle futures with triple-digit 
losses developing in live cattle and feeder cattle markets. This lack of 
support in the market continues to create concerns about additional fundamental 
support. Lean hog futures remain under pressure, but are range bound through 
the morning, with little activity developing. Corn prices are lower in light 
trade. December corn futures are 6 cents lower per bushel. Stock markets are 
lower in light trade. The Dow Jones is 142 points lower while Nasdaq is down 43 
points.

   LIVE CATTLE:

   Pressure is holding across live cattle futures with losses in all futures 
except October contracts posting triple-digit losses despite firm gains in beef 
values early in the week. The softness in cash cattle trade late last week 
combined with the concern that additional supplies of cattle available on the 
market in the future is causing many traders to once again back away from 
futures trade. The flat market and lack of premium between October and April 
contracts continues to cause concern, keeping traders from moving from one 
contract or seasonality. Cash activity remains quiet early Monday and is 
expected to remain that way the rest of the day with bids and asking prices 
still unestablished. The overall lack of direction in the market following 
lower cash trade last week may delay cash trade until the second half of the 
week, although pressure developing in futures trade could create follow-through 
concerns in the market. Beef cut-outs at midday are higher $1.33 higher 
(select) and up $0.28 per cwt (choice) with active movement of 108 total loads 
reported (46 loads of choice cuts, 22 loads of select cuts, 15 loads of 
trimmings, 25 loads of ground beef). 

   FEEDER CATTLE: 

   The combination of outside market pressure and increased placement of feeder 
cattle in feed yards in the month of August has created aggressive selling 
pressure Monday morning, pushing losses triple digits lower in most contracts. 
The potential to hold these losses may continue to create additional pressure 
through the end of the session as trades create softness in not only nearby 
contracts, but well into 2017 contract months.      

   LEAN HOGS:

   Lean hog futures continue to hold narrow to moderate losses Monday morning 
as traders remain range bound between contracts lows and the inability to break 
above short term resistance levels based on lack of fundamental or technical 
support. This is creating the potential to create a "now where's land" for an 
extended period of time, as traders seem to have no significant desire to pull 
to one side or another at this time. October futures are holding at $53.35 per 
cwt while December futures remain comfortable hovering at $48.60 per cwt. Cash 
prices are lower on the National Direct morning cash hog report. The weighted 
average price fell $1.05 per cwt to $49.83 per cwt with the range from $49.77 
to $51.00 on 3,136 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa Minnesota Direct morning cash hog report. The 
National Pork Plant Report reported 169 loads selling with prices adding $3.10 
per cwt. Lean hog index for 9/22 is at $59.88 down 0.60 with a projected 
two-day index of $58.93 down 0.95.

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


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