DTN Midday Livestock Comments 09/30 12:06

DTN Midday Livestock Comments 09/30 12:06 October Live Cattle Futures Tumble Lower Despite moderate buyer support holding in deferred contracts, the focus through the market is shifting to aggressive front-month live cattle losses of $4 per cwt at midday. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle prices have moved higher and lower through the morning as overall light trade has been seen most of the trading session. Front month live cattle futures are holding $4 per cwt losses at midday, despite mixed trade in other contracts. Hog futures are maintaining firm support based on firmness in cash values as well as elevated pork prices. Corn prices are lower in light trade. December corn futures are 3 cents per bushel lower. Stock markets are higher in light trade. The Dow Jones is 86 points higher while Nasdaq is up 44 points. LIVE CATTLE: Live cattle futures have chopped around all morning in a very wide trading range. At midday, front month October futures are leading the renewed push lower, with a $4 per cwt loss. Although deferred contracts are still maintaining light gains in late 2016 contracts, the lack of volume seen through late morning is more a factor than market direction. It is uncertain just how much follow through trade will be seen during the day, but a test of expanded limits midweek could spark another round of widespread liquidation through early October. Cash cattle activity is still quiet, although a few starter bids have been seen through the morning Wednesday. These bids are stated at $189 to $190 per cwt, which is unlikely to get much attention yet in the week. Even though packers need access to cattle, the softness in futures markets is creating some great concern in most areas. Asking prices are very fluid given outside market conditions, but around $132 and higher in the South and $202 and higher in the North. Beef cut-outs at midday are lower, $2.77 lower (select) and down $0.82 per cwt (choice) with active movement of 144 total loads reported (71 loads of choice cuts, 44 loads of select cuts, 9 loads of trimmings, 20 loads of ground beef). FEEDER CATTLE: Morning buyer support appears to be not well enough rooted to hold through midday, as triple-digit losses have once again flooded into the market, creating uncertainty about creating any market stability at the end of the month. Even though prices are still well above initial session lows, the aggressive losses near $3 per cwt in some nearby contracts is causing widespread concerns across all cattle trade. LEAN HOGS: Front-month October lean hog futures are leading the complex higher, with $1 per cwt gains holding at midday. The focus on firming pork values and higher cash prices through the end of the month is helping to keep traders from being distracted on the pressure in cattle markets. It is uncertain just how strong buyer support will remain in deferred contracts, as these markets are most susceptible to outside market pressure. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.15 per cwt to $69.92 per cwt with the range from $61.00 to $73.50 per cwt on 8,535 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 250 loads selling with prices up $0.08 per cwt. Lean hog index for 9/28 is at $72.01 up 0.15, with a projected two-day index of $72.23, up 0.22. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.