DTN Midday Livestock Comments 12/22 11:21

DTN Midday Livestock Comments 12/22 11:21 Firm Gains in Feeder Cattle Futures Lead Market Higher Follow through buyer support has developed through the cattle market Tuesday morning as traders have slowly stepped back to the complex. January feeder cattle futures are leading the complex higher with at $2.30 per cwt at midday helping to draw additional support back to the market through the week. By John Harrington DTN Analyst GENERAL COMMENTS: Cattle trade continues to move higher Tuesday as firm gains have redeveloped in both feeder cattle and live cattle markets. Unlike the limit higher gains seen the previous two sessions, gains Tuesday are more manageable and inline with a typical trading session. This is also able to draw more buyer interest as previous sessions locked out of trade due to limit price moves. Hog futures are mixed following a moderate price swing. Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are higher in light trade. The Dow Jones is 72 points higher while Nasdaq is up 5 points. LIVE CATTLE: Firm support is seen through the morning despite initial price pressure at opening bell Tuesday morning. But the ability to draw buyers back to the complex and sustain gains following the previous sharp market rallies speaks volumes about the follow through support given the newfound buyer interest in the market. As traders move forward, the focus on February contracts may build on the $130 per cwt price level. This would be nearly $8 over the market low, and could help to drive additional technical support into the market. Cash cattle activity remains still relatively quiet, although there is starting to be some packer interest starting to develop at $120 in the South. Asking prices are being seen at $123 to $124 in the South, although at this point the focus is still on the direction of the futures market. It may be Wednesday or even a tad bit later before cash markets develop but it wouldn't be too much later. Pushing business late into Christmas Eve doing cash cattle business may take the Christmas Spirit out of both packers and feeders rather quickly. Beef cut-outs at midday are lower, $1.84 lower (select) and down $0.58 per cwt (choice) with light movement of 102 total loads reported (61 loads of choice cuts, 23 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef). FEEDER CATTLE: Feeder cattle futures continue to hold strong gains Tuesday morning with front-month January futures maintaining support near $2 per cwt through most of the morning. But this support pales in comparison to the expanding trading limits seen over the last couple of trading sessions. The rest of the complex remains moderately higher as traders are willing to carefully follow the front month contract, but light volume seems unable to bring active price support to the market at this point. It is likely that firm support may continue to hold through the rest of the session, as traders continue to focus on the upcoming holidays. LEAN HOGS: Lean hog futures are mixed at midday following the trend seen most of the morning where nearby gains seen by 60 to 70 cent support in February and April contracts is being offset by the pressure in deferred contracts. The steady to weak cash market trend is limiting long term buying interest but not creating significant damage to the overall tone of the market at this point. The overall complex is likely to remain range bound through the end of the year. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.87 per cwt to $47.62 per cwt with the range from $46.73 to $49.50 per cwt on 5,069 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.66 per cwt to $48.88 per cwt with the range from $47.50 to $49.25 per cwt on 1,714 head reported sold. The National Pork Plant Report reported 250 loads selling with prices down $0.39 per cwt. Lean hog index for 12/18 is at $54.65 down 0.56, with a projected two-day index of $54.41, down 0.24. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.