DTN Midday Livestock Comments 11/05 12:15

DTN Midday Livestock Comments 11/05 12:15 Cattle Futures Widen Trade Losses Thursday Sharp losses are developing through the cattle complex with expanded trading limits allowing for even wider trading ranges and expanding the losses in both live cattle and feeder cattle markets Thursday morning. Hog futures firmed early Thursday but were unable to hold initial support. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp losses have continued to flood into the cattle trade with live cattle and feeder cattle markets quickly back peddling lower Thursday. The market remains focused on expectations of lower cash cattle trade developing and further beef value losses, which could develop at the end of the week. Hog markets have also faded lower through late morning, giving back any sense of early morning stability. Corn prices are lower in light trade. December corn futures are 3 cent per bushel lower. Stock markets are mixed in light trade. The Dow Jones is 2 points higher while Nasdaq is down 18 points. LIVE CATTLE: Live cattle futures continue to trade between $2 and $4 per cwt lower through late morning with expanded trading limits seen in nearby futures contracts. Even though these expanded trading limits have not yet been hit, the focus on lower prices has sparked concerns of additional market weakness. Additional pressure may continue to develop through the rest of the session as traders focus on end of the week positioning. Cash cattle activity remains generally quiet so far Thursday morning with a few sales seen in Nebraska around $205 to $206 per cwt. The sharp selloff in live cattle futures at midday is expected to limit support through the day if further pressure continues to hold. But packers still need to get access to cattle to fuel processing lines for next week one way or another no matter what the futures market does at the end of the week. Bids in the South are undeveloped at this point, although asking prices are seen around $140 per cwt. Beef cut-outs at midday are lower, $0.47 higher (select) and down $0.66 per cwt (choice) with light movement of 85 total loads reported (41 loads of choice cuts, 26 loads of select cuts, eight loads of trimmings, 11 loads of ground beef). FEEDER CATTLE: As expanded limits came into play during midmorning trade, traders posted losses of $5 to $6 per cwt losses in nearby feeder cattle futures. The contracts continue to make their way toward September support levels, although contracts are not at these levels yet. But concerns through both the feeder cattle and live cattle contracts point to further weakness in both technical and fundamentals that could point to additional market pressure. LEAN HOGS: Early support developed Thursday morning in nearby lean hog futures contracts but quickly eroded following pressure in the cattle complex. The push lower once again in December lean hog futures has once again put the emphasis on lower prices and is pushing futures markets toward $56 per cwt. Even setting new contract lows is not enough to limit seller activity as prices keep going deeper and deeper through the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.76 per cwt to $54.45 per cwt with the range from $51.00 to $55.00 per cwt on 3,195 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 155 loads selling with prices down $0.85 per cwt. Lean hog index for 11/3 is at $67.66 down 1.21, with a projected two-day index of $66.42, down 1.24. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.