DTN Midday Livestock Comments 10/21 11:50

DTN Midday Livestock Comments 10/21 11:50 Narrow Gains Define Live Cattle Futures Trade Live cattle and lean hog futures are confined to extremely narrow trading ranges at midday with traders focusing on lack of overall trade volume and market stability. The lack of direction through the morning may spark some additional late-day market shifts, leading to a price breakout but still lightly traded market. By Rick Kment DTN Analyst GENERAL COMMENTS: Market stability is the focus through the livestock futures complex Wednesday late morning with narrow trade ranges holding in both cattle and hog complexes. The focus through the market continues to be placed on extremely narrow moves in nearby live cattle and lean hog futures as traders try to bring some market stability following widespread triple-digit moves over the last several weeks. Corn prices are higher in light trade. December corn futures are 2 cents per bushel higher. Stock markets are higher in light trade. The Dow Jones is 91 points higher while Nasdaq is up 4 points. LIVE CATTLE: Narrow gains have slowly developed at midday with 10- to 20-cent-per-cwt price support holding through the morning with buyers slowly focusing on beef values moving higher, but at a much slower pace than what some would have desired. The expectation is that traders are looking for additional long-term trade activity to become steadily higher, and move away from the sharp triple-digit rallies, which may be more sustainable over time. This would allow cash markets to catch up, as well as keep beef values more in line with market activity. Texas wins the award for the first bids of the week with scattered bids slowly stepping into the market Wednesday morning at $137, although this is unlikely to gather much attention with asking prices well above that level at $140 to $145 through the South. No asking prices or bids are seen in the North at this point. Trade is likely to be delayed until the end of the week and may even be pushed off until after the cattle on feed report Friday. Beef cut-outs at midday are higher, $0.18 higher (select) and up $1.82 per cwt (choice) with light movement of 89 total loads reported (38 loads of choice cuts, 23 loads of select cuts, 9 loads of trimmings, 19 loads of ground beef). FEEDER CATTLE: Early market pressure developing in the complex has helped to create additional movement on both sides as position taking is developing with nearby short covering being seen in October and December contracts. Trade volume remains light as the overall tone of the market is still steady to firm given the underlying support in the cash and beef values, although there is a feeling in the market that traders are taking a short breather, although they have not totally abandoned the idea of moving away from pushing prices higher in the near future. LEAN HOGS: In a morning of directionless choppy trade, lean hog futures have moved very little with nearby contracts spanning a 7-cent price range at midday given the lack of overall movement in the market. Even though there has been some additional back and forth through the morning, the general lackluster interest seen through the morning seems to have allowed most traders to focus on outside market shifts and the ability to allow markets to wander to their own devices at this point. The fact that markets have gone essentially nowhere so far at nowhere at midday, also suggests that there could be a quick break and a move in either direction could be seen before closing bell. Cash prices unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 299 loads selling with prices up $0.39 per cwt. Lean hog index for 10/16 is at $74.35 down 0.24, with a projected two-day index of $74.32, down 0.03. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.