DTN Midday Livestock Comments 12/18 11:53

DTN Midday Livestock Comments 12/18 11:53 Cattle Futures Holding Limit Gains Limit gains which developed across the cattle complex in the opening minutes of trade Friday morning have continued to hold through midday. This support is likely to hold through the rest of the session with no evidence of traders backing away from the market at this point. By John Harrington DTN Analyst GENERAL COMMENTS: Limit-higher trade flooded into cattle trade Friday morning just after opening bell, leaving the complex locked limit higher through most of the session. The lack of activity has created very little volume, but the focus on regaining Thursday's market losses seems to be the main focus of market traders. Hog futures are posting moderate to strong gains based more on cattle market support rather than hog fundamentals. Corn prices are higher in light trade. March corn futures are 1 cent higher. Stock markets are lower in light trade. The Dow Jones is 290 points lower while Nasdaq is down 60 points. LIVE CATTLE: Live cattle futures opened with limit-higher gains flooding into the market. This support has held through the complex as traders have regained losses seen Thursday. But the speed at which markets moved to this price level so early in the session, very little activity was done in the market, leaving very little volume expected to have been done. This could limit the overall ability to maintain this support early next week if buyer support is unable to redevelop, especially with expanded limits in place if markets close at current trading levels. Cash cattle markets are generally quiet with just a few bids starting to redevelop late morning in the North at $184 per cwt on a dressed basis. It is expected that most trade is wrapped up for the week, although a few deals could be done late in the day in order for packers to gain access to fill some last-minute holiday schedules before the weekend. It is going to take more than a one day rally in futures trade to turn cash trade around from the recent market tumble seen over the last several weeks. Beef cut-outs at midday are mixed, $1.15 higher (select) and down $1.13 per cwt (choice) with light movement of 80 total loads reported (43 loads of choice cuts, 16 loads of select cuts, 1 load of trimmings, 20 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have responded to sharp Thursday's losses and the strong weeklong market slide with limit gains nearly instantly after markets opened Friday morning. This has kept overall trade volume at a minimum, which could become a challenge early next week given the lack of overall trade seen at the price levels. But if prices hold at this value, which it appears markets will, expanded trading limits will be in place Monday. This will create an interesting dynamic for what is already expected to be a lightly traded holiday week ahead. The market volatility could create some significant shifts before the end of the year. LEAN HOGS: Buyer support across lean hog futures has been impacted more by the limit higher gains across the cattle complex than any other factor affecting the meat market. February lean hog futures continue to lead the complex higher with a gain of $1.67 per cwt, but this support is well off of morning highs of $2.30 per cwt as traders are starting to moderate buyer support. Gains are seen across the entire complex, although any support past April contracts has been limited to double digit support at midday with only limited buyer activity seen through the last half of the day Friday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.85 per cwt to $47.81 per cwt with the range from $44.00 to $49.50 per cwt on 4,019 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $1.16 per cwt to $48.05 per cwt with the range from $46.00 to $49.50 per cwt on 1,896 head reported sold. The National Pork Plant Report reported 163 loads selling with prices up $0.94 per cwt. Lean hog index for 12/16 is at $55.57 down 0.31, with a projected two-day index of $55.21, down 0.36. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.