DTN Midday Livestock Comments 10/20 12:01

DTN Midday Livestock Comments 10/20 12:01 Nearby Live Cattle Futures Push Higher At Midday Firm support develops through the live cattle futures at midday as traders focus on solid boxed beef values and the potential of firming cash values at the end of the week. Sharp gains redeveloped in front-month lean hog futures as traders quickly moved their focus away from cattle markets back to hog markets. By Rick Kment DTN Analyst GENERAL COMMENTS: Live cattle futures have posted moderate nearby gains, with October futures holding 82 cent gains at midday. Lean hog futures are leading the market higher following triple-digit support in nearby contracts. Corn prices are higher in light trade. December corn futures are 2 cents per bushel lower. Stock markets are lower in light trade. The Dow Jones is 15 points lower while Nasdaq is lower 26 points. LIVE CATTLE: Early pressure in nearby live cattle futures has eroded, allowing for renewed but light buying to slowly develop at midday. This steady but solid price support seen in nearby live cattle futures has been a welcome surprise given the sharp shifts which have developed over the last week. Typically sharp gains are followed by sharp losses, and then slowly ripple into narrower price moves, but the continued support indicates the ability to continue to build support at a more sustained pace, which may help to draw more fundamental activity into the market through the rest of the week. Cash markets are still quiet with just a few asking prices seen in the South at $140 to $142. Bids may not develop until midweek and active trade could not be seen until late in the week. Beef cut-outs at midday are higher, $2.17 higher (select) and up $1.58 per cwt (choice) with light movement of 71 total loads reported (27 loads of choice cuts, 17 loads of select cuts, 10 loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: Feeder cattle futures remain under pressure as October contracts are leading the market lower holding a $1.40 per cwt loss. The tone through the complex has been focusing on position squaring given the $15 per cwt rally through the month of October. At this point there is little concern that a major pullback is in order, as traders are more concerned about an uncorrected shift higher could create a major reversal later in the year if beef demand does not steadily follow. Light volume is expected through the end of the session, which should keep current price levels in check through the remainder of the trading day. LEAN HOGS: Triple-digit gains flooded into nearby lean hog futures Tuesday morning with December contracts posting gains at or near $2.50 per cwt through most of the morning. The support in front-month futures is helping to draw renewed support above $68 per cwt once again as traders look for increased cash market support and the ability to sustain additional buyer support through fourth quarter lean hog contracts. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.37 per cwt to $69.51 per cwt with the range from $68.00 to $70.00 per cwt on 329 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 235 loads selling with prices down $0.24 per cwt. Lean hog index for 10/16 is at $74.59 down 0.37, with a projected two-day index of $74.35, down 0.24. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.