DTN Midday Livestock Comments 01/07 12:02

DTN Midday Livestock Comments 01/07 12:02 Limit Losses Flood Into Feeder Cattle Complex Thursday Feeder cattle futures turn sharply lower limited by daily trading limits of $4.50 per cwt following the lack of buyer support unwilling to step back into the complex. The aggressive follow-through pressure redeveloping in outside markets has finally wore out any support seen in the market. By Rick Kment DTN Analyst GENERAL COMMENTS: Aggressive losses are seen in the cattle market as feeder cattle have quickly turned limit lower with $4.50 per losses holding at midday. The lack of support in outside markets is expected to keep buyers out of the market at this point, and could limit additional support through the entire complex. Lean hog futures remain mixed in a narrow range, although trade volume is light. Corn prices are lower in light trade. March corn futures are 1 cent lower. Stock markets are lower in light trade. The Dow Jones is 222 points lower while Nasdaq is down 88 points. LIVE CATTLE: Limit losses which have quickly developed in feeder cattle futures are driving the live cattle futures lower midday Thursday. This is creating additional market pressure through the complex, and may quickly turn live cattle futures to limit losses before the end of the session. Cash cattle markets are still untraded, although a few bids are redeveloping in Nebraska at $210. Active trade is likely to be pushed Friday. Beef cut-outs at midday are higher, $2.57 higher (select) and up $2.63 per cwt (choice) with light movement of 75 total loads reported (41 loads of choice cuts, 11 loads of select cuts, 6 loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: The combination of moderate to strong losses early in the trading session through feeder cattle as well as strong pressure in outside markets have finally broken the resolve of the cattle market and pushed feeder cattle futures to limit losses at midday. The complex is locked $4.50 per cwt lower with traders under severe pressure despite strong gains in boxed beef values in the morning report. The concern that additional softness may continue to develop through the rest of the month and further outside market pressure may pull previous market gains away from the cattle market is causing aggressive selling activity into the market. LEAN HOGS: Lean hog futures have remained generally directionless through most of the morning with mixed trade seen in nearby contracts. April futures remain slightly higher based on light buyer support unable to be shaken by the aggressive outside market pressure. Although the rest of the complex is holding narrow losses due to underlying concerns that global market weakness may limit pork demand. Trade volume remains extremely light through the entire complex, which has actually pulled most contracts off of session lows and allowed prices to remain stable through midday. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 205 loads selling with prices up $0.32 per cwt. Lean hog index for 1/5 is at $53.29 up 0.34, with a projected two-day index of $53.50, up 0.21. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.