DTN Midday Livestock Comments 11/04 12:10

DTN Midday Livestock Comments 11/04 12:10 Limit Losses Hold Across Cattle Complex Cattle futures are plagued by limit losses Wednesday morning as aggressive selling pressure flooded into nearby futures. The concern created widespread pressure through the entire livestock market, as lean hog futures buckled under the pressure through the morning, trading moderately lower at midday. By Rick Kment DTN Analyst GENERAL COMMENTS: Limit losses are holding through the cattle complex as market bearishness, which started early in the week, has continued to grow with a passion and seemed to explode Wednesday morning. This is pressuring the entire livestock complex and is likely to create weakness through the rest of the week. Corn prices are higher in light trade. December corn futures are 1 cent per bushel higher. Stock markets are lower in light trade. The Dow Jones is 47 points lower while Nasdaq is down 7 points. LIVE CATTLE: Nearby live cattle futures are locked limit lower with $3-per-cwt losses keeping markets bearish through the session. This will keep overall trade volume extremely light through the session and will also expand trading limits given that markets close at current price levels. At this point, there is no evidence that markets will not close anywhere other than limit lower given the bearishness of the entire complex. Deferred futures are not trading at limit losses, but the lack of pressure is more due to light volume than market support. Cash cattle markets are silent at midday Wednesday despite early bids in the North which were retracted once limit-lower trade quickly developed in the futures market. Asking prices in the South were reported at $142 early in the day, but even those numbers have shriveled throughout the day as the entire complex is taking a step backward given the tumble in futures markets. At this point, it is likely to be Thursday or Friday before active trade develops unless there is some panic selling seen where feeders try to unload cattle with the fear that prices may continue to tumble lower as the week continues. But, at this point, it is likely that most will hold out for the time being. Beef cut-outs at midday are higher, $0.57 higher (select) and up $2.18 per cwt (choice) with light movement of 90 total loads reported (32 loads of choice cuts, 18 loads of select cuts, 15 loads of trimmings, 24 loads of ground beef). FEEDER CATTLE: Feeder cattle futures quickly liquidated Wednesday morning, posting daily limit losses early in the session and remaining locked at this level through the rest of the session. The bearishness of the complex has been the focus across the complex and is creating concern through the entire market, which is likely to carry into the rest of the week. It is uncertain just how much momentum will be seen Thursday as markets will have expanded trading limits given that markets close at current levels. LEAN HOGS: Moderate pressure developed through lean hog futures as spillover liquidation from the cattle complex was too much for nearby hog contracts to overcome Wednesday morning. December lean hog futures are holding a 60-cent-per-cwt loss, trading near $57.50 per cwt as the focus continues to be driven by lower cash hog prices and eroding pork values. Trade volume remains sluggish midday, which is likely to keep prices in a narrow range through the rest of the trading session. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.08 per cwt to $56.64 per cwt with the range from $56.00 to $57.50 per cwt on 5,745 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 284 loads selling with prices down $1.03 per cwt. Lean hog index for 11/2 is at $68.87, down 1.11, with a projected two-day index of $67.66, down 1.21. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.