DTN Midday Livestock Comments 09/11 12:03

DTN Midday Livestock Comments 09/11 12:03 Livestock Futures Tumble Lower Friday Triple-digit losses are holding across all nearby livestock contracts with the focus on weakness in live cattle futures over $2 per cwt. By Rick Kment DTN Analyst GENERAL COMMENTS: Livestock futures have tumbled lower Friday morning with nearby cattle futures testing support levels, and eroding early-week market strength. The focus through the complex is expected to remain on the ability to draw additional trade activity into live cattle and feeder cattle markets despite the expectation of softer cash cattle trade by the end of the week. Corn prices are higher in light trade. September corn futures are 6 cents per bushel higher. Stock markets are higher in light trade. The Dow Jones is 76 points higher while Nasdaq is up 12 points. LIVE CATTLE: Sharp losses developing in the live cattle complex are testing short and long-term support levels. The move early in the morning broke through the August 26 close of $140.37 per cwt, and a close below this level could dissolve any confidence that may had been building through the week about establishing a double bottom to the market. Price volatility remains high through the entire cattle complex, which could spark some additional market softness late Friday. Cash cattle markets remain mostly quiet with bids redeveloping in both north and south and a few light sales seen in Nebraska at $219 per cwt. Trade in the South is still quiet Friday, although some additional movement is expected before the end of the day. Given the pullback in futures prices, it is likely that the trend will be lower from both last week and Thursday when all the dust settles. Beef cut-outs at midday are lower, $0.97 lower (select) and down $1.08 per cwt (choice) with active movement of 97 total loads reported (57 loads of choice cuts, 24 loads of select cuts, zero loads of trimmings, 17 loads of ground beef). FEEDER CATTLE: Even though feeder cattle futures have bounced off of session lows seen through mid-morning, the lack of support across the complex is hard to ignore. The feeder cattle complex is stuck in a tight trading range with all nearby futures holding $3.65 to $3.80 per cwt losses at midday. The combination of softness in most other commodity markets as well as aggressive pressure in the live cattle market is creating follow through weakness through the market. The swift shift lower through the morning has totally erased the gains seen Tuesday, and a close in these price ranges will place another lower close to the weekly chart, indicating additional pressure may develop early next week. LEAN HOGS: Even though lean hog futures are having much less aggressive losses through the morning than the neighboring cattle complex, triple-digit losses are seen in nearby contracts. The focus through the complex is being placed on the combination of eroding cash markets as well as concern that weakness in cattle markets will severely damage longer-term buyer support through the rest of the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $2.02 per cwt to $64.48 per cwt with the range from $59.00 to $66.50 per cwt on 2,130 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $2.67 per cwt to $64.26 per cwt with the range from $64.00 to $66.50 per cwt on 405 head reported sold. The National Pork Plant Report reported 172 loads selling with prices falling $0.03 per cwt. Lean hog index for 9/9 is at $73.08 down 0.84, with a projected two-day index of $72.70, down 0.38. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.