DTN Midday Livestock Comments 10/22 11:54

DTN Midday Livestock Comments 10/22 11:54 Feeder Cattle Futures Surge Higher At Midday Following a sluggish start, feeder cattle futures have quickly awoken with aggressive triple-digit gains developing in all contract months. Traders are quickly starting to focus on potential lower placements in Friday's cattle on feed report as well as the potential that additional momentum may continue to develop in cash markets through the end of October. By Rick Kment DTN Analyst GENERAL COMMENTS: Feeder cattle futures have regained market support as firm buyer support quickly developed Thursday morning. This has pushed triple-digit gains back into all nearby and deferred feeder cattle contracts, helping to limit early live cattle losses. Lean hog futures remain lightly traded with lackluster trade. Corn prices are lower in light trade. December corn futures are 2 cents per bushel lower. Stock markets are higher in light trade. The Dow Jones is 303 points higher while Nasdaq is up 84 points. LIVE CATTLE: Mixed trade is seen through live cattle futures at midday as traders slowly back away from early losses based on the support developing in feeder cattle futures. Traders which are starting to factor in early pre report projections of cattle on feed placement expectations are starting to build support into deferred live cattle contracts, although the building support remains weak. This could be limited but may help to draw additional interest through the end of the session. Cash markets remain quiet Thursday late morning with just a few scattered bids seen through the market with $136 prices developing in the South and $205 prices available in the North. There isn't even any evidence of asking prices developing at this point in the North. It could be well after the cattle on feed report Friday before active trade develops. Beef cut-outs at midday are mixed, $0.26 lower (select) and up $1.53 per cwt (choice) with light movement of 70 total loads reported (35 loads of choice cuts, 17 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have turned higher midmorning as widespread gains are seen through both nearby and deferred contracts. The strength across the complex is holding $1 to $2 per cwt gains in most contracts, but it is uncertain if this support will be able to hold through the end of the session. Traders are looking for additional support from live cattle contracts to confirm the upward moves, but most of the morning gains are expected to be based on pre-report adjustments to the cattle on feed report released Friday afternoon. LEAN HOGS: Lackluster trade activity has continued to develop through the morning across the entire lean hog complex with all contracts limited from 10 to 30 cent losses as traders focus on sluggish trade volume and lack of overall direction in both technical and fundamental signals through the end of the week. The inability for December lean hog futures to break through $68 per cwt levels has created a stalling pattern in the complex, and although the market has not retraced its steps lower, traders seem content to just hover within a narrow range at the end of the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.30 per cwt to $68.62 per cwt with the range from $68.00 to $71.00 per cwt on 3,688 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.79 per cwt to $69.48 per cwt with the range from $68.00 to $71.00 per cwt on 1,500 head reported sold. The National Pork Plant Report reported 162 loads selling with prices falling $1.14 per cwt. Lean hog index for 10/16 is at $74.32 down 0.03, with a projected two-day index of $74.27, down 0.05. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.