DTN Midday Livestock Comments 08/26 11:57

DTN Midday Livestock Comments 08/26 11:57 Sharp Feeder Cattle Losses Redevelop Continued pressure is seen through the cattle complex as once again sharp triple-digit losses in feeder cattle futures have live cattle markets trying to look for protection. Feeder cattle losses are holding from $2 to $3 per cwt in most contracts with further pressure developing as the session continues. Lean hog futures are also posting triple-digit losses in most nearby contracts as traders are backing away from early-week gains. By Rick Kment DTN Analyst GENERAL COMMENTS: Early mixed trade seen through the livestock complex has quickly moved to moderate to strong pressure in both cattle and hog futures. Although hog futures are least impacted at this point, the evidence of triple digit losses in all market segments is once again creating defensiveness to develop at the end of the day. Corn prices are lower in light trade. September corn futures are 3 cents per bushel lower. Stock markets are higher in active trade. The Dow Jones is 144 points higher while Nasdaq is up 36 points. LIVE CATTLE: Continued pressure in feeder cattle futures has once again turned live cattle futures defensive through midday. Even though August futures are limited to 67 cent losses at midday, the rest of the complex is hovering between $1 and $2 per cwt lower. Concern about upcoming demand support and the inability to significantly push beef values higher through the month of August is accenting the widespread market uncertainty in many other markets. Cash cattle markets are undeveloped with just a few scattered bids of $144 per cwt seen in the South and $226 bids developing in Nebraska. There seems to be very little interest in doing business sooner than later, so this could drag on into Thursday and likely Friday sometime before active trade is seen. Asking prices are still hard to pinpoint, but once again seen around $150 in the South and $236 and higher in the North. Beef cut-outs at midday are higher, $0.70 higher (select) and up $0.41 per cwt (choice) with light movement of 97 total loads reported (46 loads of choice cuts, 22 loads of select cuts, 15 loads of trimmings, 14 loads of ground beef). FEEDER CATTLE: The sense of stabilizing markets that seemed to take hold early in the session Wednesday has quickly been dashed, leaving markets $2 to $3 per cwt lower in all contracts except the soon to expire August futures. August contracts are expected to remain in a narrow range hovering around $210 to $211 per cwt through the rest of the contracts live, although the rest of the complex is trying to find a new normal with prices seen between $183 and $196 per cwt. A consistent break to sub-$200 feeder cattle values could significantly change the overall outlook of the industry which has consistently held prices above the $200 price level for well over a year. LEAN HOGS: Even though traders continue to hold onto strong gains seen early in the week, the continued pressure seen in cattle trade is starting to pull trade activity back from the narrowly mixed levels which developed early Wednesday morning. Nearby contracts are holding losses of 57 cents to $1.17 per cwt at midday, although at this point it does not appear that the recent market support is in jeopardy of fully eroding in the near future. But the aggressive gains Monday and Tuesday have created an opportunity for a market correction allowing traders to take positions. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.34 per cwt to $73.25 per cwt with the range from $72.00 to $75.00 per cwt on 4,622 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 257 loads selling with prices falling $1.95 per cwt. Lean hog index for 8/24 is at $78.79 down 0.10, with a projected two-day index of $78.79, unchanged. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.