DTN Midday Livestock Comments 12/30 12:12

DTN Midday Livestock Comments 12/30 12:12 Feeder Cattle Futures Testing Limit Gains Wednesday Morning Buyer support quickly flooded back into the feeder cattle market as traders quickly looked past the market pressure seen the past two trading sessions as an opportunity to move back into the cattle complex. By Rick Kment DTN Analyst GENERAL COMMENTS: Aggressive gains have redeveloped through the cattle complex midday Wednesday as traders have quickly moved back to the market following any market corrections that seemed to be taking place. The surge higher in feeder cattle markets is helping to draw increased support through live cattle trade also and sparking increased interest into cash cattle trade late morning, although no sales have yet been reported at midday. Hog futures are still undeveloped with traders content to watch from the sidelines. Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are lower in light trade. The Dow Jones is 56 points lower while Nasdaq is down 20 points. LIVE CATTLE: The sharp rally in feeder cattle futures has sparked increased buyer support through the live cattle market with nearby support quickly seen midday. December live cattle futures have surged $3.07 per cwt higher as trade limits have been waved due to December contracts being in delivery. February and April futures are holding gains above $2 per cwt with the support being driven by nearby feeder cattle futures over $4 per cwt higher. The ability to draw buyers back into the market after the previous market softness continues to solidify market support in the complex and push markets to even higher price levels heading into the end of the month. Cash cattle trade remains quiet Wednesday morning although bids have jumped considerately in the south midmorning following the rally in the futures trade. Moving from previous levels of $126 to now $132-$133 per cwt live basis and $212 dressed basis. Northern bids are seen at $200 to $202 at this point. Asking prices are expected to be near $134 to $135 per cwt in the South and $205 in the North. It is likely that active trade will be delayed until late Wednesday or Thursday. Beef cut-outs at midday are higher, $3.14 higher (select) and up $1.91 per cwt (choice) with light movement of 76 total loads reported (38 loads of choice cuts, 14 loads of select cuts, 5 loads of trimmings, 17 loads of ground beef). FEEDER CATTLE: Gains through feeder cattle trade continue to expand as the day continues with nearby contracts expanding above $4 per cwt higher as traders look for increased market buyer activity. With January futures above $166 per cwt and March futures pushing above the $160 per cwt price level, traders continue to focus on increased market support leading up to the end of the year. The pullback seen early in the week has created some market correction and allowed for buyers to once again become willing to aggressively step back into the market. LEAN HOGS: Lean hog futures remain lightly trade Wednesday with traders focusing on very little market movement through the morning. Front-month February contracts continue to hold light gains, while the rest of the complex is under narrow pressure. The limited trade volume in the market continues to keep traders looking not only to the abbreviated weekly activity due to the New Year's Day holiday on Friday, but also year-end positioning that is going on through the week. The rally seen in the cattle complex is also limiting more focus on the lean hog cattle market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.35 per cwt to $48.88 per cwt with the range from $46.00 to $49.00 per cwt on 3,759 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.42 per cwt to $48.04 per cwt with the range from $48.00 to $49.00 per cwt on 745 head reported sold. The National Pork Plant Report reported 199 loads selling with prices down $2.30 per cwt. Lean hog index for 12/28 is at $53.13 down 0.37, with a projected two-day index of $52.97, down 0.16. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.