DTN Midday Livestock Comments 01/17 11:51
Feeder Cattle Lead Complex Lower
Pressure quickly developed across all feeder cattle markets as triple-digit
losses quickly moved prices below short-term support levels in spot January
contracts. This sparked additional weakness through the entire cattle market.
By Rick Kment
Sharp losses quickly developed in nearby feeder cattle trade early Thursday
morning. This sparked additional weakness through the entire cattle complex.
Lean hog futures remain mixed as spillover selling still continues in several
deferred contracts even though traders are trying to cover short positions in
front-month futures. Corn markets are higher in light trade. March corn futures
are 1 3/4 cent higher. Stock markets are mixed in light trade. Dow Jones is 8
points lower with Nasdaq up 12 points.
Strong losses have quickly developed in live cattle trade Thursday morning
following aggressive morning losses across feeder cattle trade. The momentum
seen in feeder cattle is pulling back from recent contract highs in the live
cattle and starting to create market pressure in all cattle trade. With prices
still in the top end of trading ranges, and fundamental support still strong,
current losses are likely to be limited through the rest of the session
Thursday. Cash trade is still undeveloped with a few token bids resurfacing at
$197 per cwt dressed basis in Nebraska. It is likely that bids may become more
active through the day, although trade may not develop until Friday. Asking
prices are starting to develop at $128 and higher live, and $203 dressed. Boxed
Beef cut-outs at midday are higher, $1.00 higher (select) and up $0.61 per cwt
(choice) with light movement of 75 total loads reported (32 loads of choice
cuts, 13 loads of select cuts, 6 loads of trimmings, 24 loads of ground beef).
Weakness has quickly developed in feeder cattle trade Thursday morning with
the feeder cattle market leading the entire complex lower. Sharp triple-digit
losses in spot January futures sparked increased underlying weakness through
the entire complex as triple-digit losses were seen in all contract months.
Even though selling activity was limited, and pulled prices off session lows,
the move below support levels seen last fall has created bearish market shifts
through the entire complex. Other nearby contracts still remain range bound,
but have backed away from previous support which developed over the last two
Firm pressure has redeveloped through the lean hog complex with increased
follow through selling after Wednesday's losses. February futures, which led
the complex lower, has bounced higher, holding a 45 cent per cwt gain. The
overall tone of the market remains weak with growing concern about demand
support through late spring and summer. Currently, support levels at $60 per
cwt in spot month contacts are holding, allowing for limited stability in
February futures. Cash prices are unreported due to confidentiality on the
National Direct morning cash hog report. Cash prices unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork
carcass values are higher on the morning report with prices gaining $0.90 per
cwt at $70.54 per cwt with 192 loads traded. Lean hog index for 1/15 is $58.02,
up 0.37, with a projected two-day index is $58.18, up 0.16.
Rick Kment can be reached at email@example.com
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