DTN Midday Livestock Comments 09/16 11:52
Early Pressure Erodes Buyer Interest
Livestock futures remain mostly lower at midday, but have regained
significant ground following sharp triple-digit lows early in the session.
Traders are looking for additional outside market direction as well as
potential moves in cash markets.
By Rick Kment
Even though livestock futures continue to trade mostly lower at midday, the
significant bounce off of session lows in all markets is creating some
stability through the Tuesday session. It is uncertain if this will have a
significant impact over the next couple of trading sessions, but traders are
looking for additional longer-term support. Corn futures are lower at midday.
December corn futures are 2 cents per bushel lower. Stock markets are higher in
light trade. The Dow Jones is 108 points higher while Nasdaq is up 23 points.
Live cattle futures remain moderately lower at midday, but have regained
most of the morning losses as lack of follow-through pressure in the lean hog
and feeder cattle markets seem to be driving trade activity through most live
cattle contracts. With very little direction available from market fundamentals
over the last couple of days, prices may be unable to break out of the current
market range, and may wander in this zone for a while. Cash cattle markets
remain at a standstill with no bids developing and very little interest seen
through the complex. At this point, it is expected to be the last half of the
week before active trade develops, as both sides are aggressively trying to
advance their positions. Asking prices are around $164 in the South and $253 to
$255 in the North, but still not plentiful as many are still assessing the
overall market condition. Beef cut-outs at midday are mixed, $0.22 per cwt
higher (select) and down $0.40 per cwt (choice) with light movement of 82 total
loads reported (39 loads of choice cuts, 24 loads of select cuts, 7 load of
trimmings, 11 loads of ground beef).
Feeder cattle futures have battled back through morning trade after holding
strong triple-digit losses. The sharp pressure in hog futures seemed to direct
trade activity through the rest of livestock markets, allowing for early
losses. It is uncertain if buyers will be able to sustain current gains, and
could spark additional market strength through the rest of the live cattle
market before closing bell.
Trade in the lean hog futures market continues to show the separation of
October contracts and the rest of the complex. Sharp early losses have softened
as the trading session has continued, which is leaving markets mixed at midday.
Front-month October contracts continue to hold 60 cent per cwt gains, while
moderate to strong losses are holding strong through the rest of the complex.
The fear of weaker demand through the end of the year is keeping markets under
pressure. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $1.84 per cwt to $98.88 per cwt with the range
from $96.00 to $104.50 per cwt on 3,841 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 2.14 loads selling as prices
gaining $0.26 per cwt. Lean hog index for 9/12 is at $102.26 up 0.92, with a
projected two-day index of $103.22 up 0.96.
Rick Kment can be reached at email@example.com
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