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DTN Midday Livestock Comments          10/24 11:51

   Live Cattle Futures Turn Lower       

   Early futures support and strong gains in cash cattle markets have had 
little impact midday Friday when sharp losses have flooded into the market. 
End-of-week positioning and pre report adjustments are leading to moderate to 
strong price weakness. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Moderate to strong pressure has developed through the livestock markets with 
cattle futures showing the most pressure with triple-digit losses seen at 
midday. The interest based on sharply higher cash cattle prices was short 
lived, with traders now moving onto the afternoon cattle on-feed report as well 
as end-of-week positioning. Lean hog futures are under pressure although trade 
volume has slowed significantly. Corn prices are lower in light trade. December 
corn futures are 4 cents per bushel lower. Stock markets are higher in light 
trade. The Dow Jones is 88 points higher while Nasdaq is up 17 points.

   LIVE CATTLE:

   Light to moderate gains started the Friday trading session, but this support 
was unable to hold as the morning continues. Traders quickly gave back early 
gains, with most contracts now holding triple digit losses. Even the strong 
support in the cash market is not able to keep traders interested through the 
end of the session. The focus through the last couple hours of trade has now 
quickly moved to the upcoming cattle on feed report as well as prime position 
squaring opportunities after setting record high price levels in nearby 
contract months. Following sharply higher cash cattle trade in all areas on a 
live basis Thursday afternoon, some additional dressed deals are being done at 
$265 per cwt. This puts cash trade generally $6 to $7 per cwt over last-week 
levels, which is expected to set the tone on cattle being priced for next week. 
Beef cut-outs at midday are lower, $1.10 per cwt lower (select) and down $2.39 
per cwt (choice) with active movement of 173 total loads reported (77 loads of 
choice cuts, 64 loads of select cuts, 22 loads of trimmings, nine loads of 
ground beef).

   FEEDER CATTLE:

   Triple-digit losses are seen in nearby feeder cattle futures midday Friday 
despite the complex starting out in positive territory. After the cash market 
support seemed to clear the market, traders started to focus on the afternoon 
cattle on feed report which is expected to show a slight increase in feeder 
cattle placements through the month of September. The fear that a strong bounce 
in placements will move the focus over the already well traded fact that 
supplies remain tight, and on concerns of an overbought market like seen within 
the last couple of weeks. October futures are leading the market lower with 
losses near $1.70 per cwt. 

   LEAN HOGS:

   Nearby lean hog futures losses have remained narrow despite growing pressure 
through early 2015 contracts and further erosion in pork values in the morning 
report. The focus across the complex has been put on further fundamental market 
weakness although at this point, traders in the December and February contracts 
appear to be more focused on position squaring in front of the weekend. The 
thinly traded contracts in the fourth quarter of 2015, are showing some 
additional price support, but this is not expected to change the overall tone 
through the rest of the market. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price lost $1.05 per cwt to 
$90.28 per cwt with the range from $78.00 to $90.47 per cwt on 1,782 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 172 loads selling as prices falling $2.34 per cwt. Lean hog index for 
10/22 is at $102.40 down 1.77, with a projected two-day index of $100.35 down 
2.05.

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


(SK)

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