DTN Midday Livestock Comments 12/08 12:00

DTN Midday Livestock Comments 12/08 12:00 Gains Redevelop in December Cattle Contracts Firm support has redeveloped Tuesday morning in nearby cattle futures as traders try to establish some stability following the recent market slide. Firm support is seen in lean hog trade as buyers have reacted to the fact that markets overcorrected due to cattle market pressure Monday. By Rick Kment DTN Analyst GENERAL COMMENTS: Firm support has redeveloped Tuesday morning in nearby cattle futures as traders try to establish some stability following the recent market slide. The underlying weakness in deferred markets continues to keep traders under pressure, which is limiting overall buyer support. Nearby live cattle futures continue to hold moderate gains, December futures are holding triple-digit gains, as follow through support continues to trickle into other nearby contracts. Firm support is seen in lean hog trade as buyers have reacted to the fact that markets overcorrected due to cattle market pressure Monday. Corn prices are higher in light trade. December corn futures are 1 cent higher in front-month December contracts. Stock markets are lower in light trade. The Dow Jones is 163 points lower while Nasdaq is down 12 points. LIVE CATTLE: Movement across the live cattle market has seen a shift between nearby and deferred contracts. Moderate gains continue to hold in December through April futures following light buyer support stepping back into the market. But the lack of interest in deferred contracts continues to keep the market under pressure, creating widespread concern of longer-term market weakness. Cash bids are seen in parts of Nebraska at $187 to $188 through the morning. This is well below the average price last week, which was just shy of $194 per cwt. The interesting thing is that there are no asking prices developing through either the North or the South at this point, as feeders are willing to sit on their hands waiting to see what happens through the rest of the market, at least for a couple of days. Beef cutouts at midday are higher, $0.92 higher (select) and up $1.84 per cwt (choice) with light movement of 80 total loads reported (33 loads of choice cuts, 16 loads of select cuts, 16 loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: Wide price swings through the feeder cattle market Tuesday continue to be seen through the complex as the focus has moved away from short-covering seen early in the session to follow-through selling activity. Nearby futures are holding 50 to 80 cent losses as traders continue to focus on the lack of support in deferred live cattle market contacts. LEAN HOGS: Nearby buyer support quickly redeveloped through lean hog futures contracts as traders focused on the aggressive pressure seen in the complex Monday as being overextended due to sharp spillover losses in cattle trade. But the lack of follow-through pressure in cattle markets has allowed buyers to quickly step back into nearby futures with December through April futures holding strong, late-morning gains. The focus on potential cash and pork market stability through the last couple weeks of December could bring additional light market support into lean hog trade, although prices may continue to be rangebound by the previous market moves over the last couple of weeks. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.89 per cwt to $50.38 per cwt with the range from $49.81 to $52.00 per cwt on 4,881 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 281 loads selling with prices down $3.32 per cwt. Lean hog index for 12/4 is at $56.22 down 0.08, with a projected two-day index of $56.32, up 0.10. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.