DTN Midday Livestock Comments 10/23 12:01
Live Cattle Futures Hold Narrow Trade Range
Sharp early losses in feeder cattle futures have quickly retracted following
buyers stepping back into the complex. Narrow price moves are seen in live
cattle markets with mixed trade.
By Rick Kment
Firm pressure continues to be seen in nearby feeder cattle and lean hog
futures midday Monday. Feeder cattle contracts have pulled back significantly
from the sharp early losses that developed at opening bell as traders back away
from the cattle on feed report results. Sluggish trade in live cattle markets
has left markets mixed in a narrow range. Corn prices are higher in light
trade. December corn futures are 6 cents per bushel lower. Stock markets are
mixed in light trade. The Dow Jones is 15 points higher while Nasdaq is down 8
Live cattle futures remain stuck in a narrowly mixed trading range midday
Monday with the focus on increased market activity seen in feeder cattle
futures following prices pulling back from the aggressive market losses.
October and December live cattle futures are holding narrow gains of 2 to 12
cents per cwt while other nearby contracts are comfortable holding narrow
market losses in very sluggish morning trade. The overall lack of pressure in
the complex comes while traders look for a sense of optimism from beef demand
over the next several weeks which could stimulate additional market activity.
Cash cattle markets are undeveloped Monday morning with show lists generally
smaller across the country. This focused on offerings in southern states quite
a bit smaller. It is likely that bids and offers may not be well established
until later in the week with a general stalemate between packers and feeders
that could last until the end of the week once again. Beef cut-outs at midday
are mixed, $0.71 higher (select) and down $0.54 per cwt (choice) with light
movement of 40 total loads reported (18 loads of choice cuts, 9 loads of select
cuts, 7 loads of trimmings, 5 loads of ground beef).
Sharp early losses following the bearish cattle on feed report Friday has
quickly eased during morning trade as traders have taken a much more balanced
approach to the complex. This is focusing on the expectation that even though
traders have known about supply growth over the last several weeks and months,
the expectation appears to be that demand will remain strong over the immediate
and long term future. Firm pressure is still seen in November and January
futures. But buyers have cut losses in have from earlier pressure as feeder
cattle markets are trading 40 cents to $1 per cwt lower at midday.
Light trade continues to be seen across the lean hog futures complex with
nearby futures backing away from initial early gains as losses have developed
in December through April contracts. This has posted losses of 5 to 72 cents
per cwt as traders continue to focus on very light moderate activity through
the entire morning while deferred futures are holding gains of 10 to 25 cents
per cwt. The overall lack of support in nearby hog markets have little to do
with long term market shifts and more to do with overall lack of activity early
Monday morning. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price fell $0.01 at $64.45 per cwt with the range
from $62.00 to $64.45 on 3,193 head reported sold. Cash prices are lower on the
Iowa/Minnesota Direct morning cash hog report. The weighted average price fell
$2.62 at $62.56 per cwt with the range from $62.00 to $64.00 on 257 head
reported sold. The National Pork Plant Report reported 149 loads selling with
prices falling $0.19 per cwt. Lean hog index for 10/16 is at $61.00 up $0.76
with a projected two-day index of $62.21, up $1.21.
Rick Kment can be reached at firstname.lastname@example.org
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