DTN Midday Livestock Comments 01/12 12:12

DTN Midday Livestock Comments 01/12 12:12 Mixed Cattle Futures Back Away From Early Gains Cattle futures have backed away from early support with mixed trade seen at midday in both live cattle and feeder cattle markets. The focus through the lean hog complex continues to hold strong support in nearby trade. There continue to be increased focus on additional cash hog market development through the next several days. By Rick Kment DTN Analyst GENERAL COMMENTS: Following the lack of direction in lean hog futures trade through the last week, strong buyer support has quickly developed in nearby contracts. This has helped to push front month February futures $2 per higher Tuesday. Cattle markets have backed away from strong early gains following the support of grain markets, allowing for mixed trade in both live cattle and feeder cattle futures. Corn prices are higher in light trade. March corn futures are 8 cents higher. Stock markets are mixed in light trade. The Dow Jones is 24 points lower while Nasdaq is up 3 points. LIVE CATTLE: Live cattle futures are holding a mixed trading pattern with narrow ranges seen midday. The inability for beef values to continue to move sharply higher after last weeks moves is causing some uncertainty in nearby live cattle futures, but live cattle futures seem to be honing in on price stability around $132 per cwt. The variability in feeder cattle markets at midday may continue to show increased shifts through deferred live cattle futures, which may spark additional trade, although focus on cash markets will continue to drive futures activity through midweek. Cash cattle is generally light, although there is reports of a few cattle traded at steady money to $2 per cwt higher in Nebraska on both live basis and dressed basis Tuesday morning. It is likely that most active trade may develop through midweek or later as asking prices of most cattle are at $135 to $138 live basis. Beef cut-outs at midday are mixed, $1.37 lower (select) and up $0.51 per cwt (choice) with light movement of 65 total loads reported (35 loads of choice cuts, 14 loads of select cuts, 5 loads of trimmings, 11 loads of ground beef). FEEDER CATTLE: Early strong support in feeder cattle futures has quickly eroded from session highs, with mixed trade holding at midday. Nearby contracts continue to hold gains ranging from 2 to 80 cents per cwt while deferred contracts are holding narrow losses due to firming support in the grain markets following the morning USDA supply and demand crop report. The higher cost of production coming from the report is expected to create additional softness through the market through the end of the morning. LEAN HOGS: Lean hog futures continue to hold strong triple-digit gains in nearby February and April contracts as renewed support is based on the expectation that firm cash market support is building through the first couple weeks of the 2016 year and will continue to be seen over the near future. This has pushed February futures above $61 per barrel, which is sparking a combination of commercial and noncommercial buyer support as traders look for additional underlying support based on building pork demand support over the first quarter of the year. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 303 loads selling with prices up $0.78 per cwt. Lean hog index for 1/8 is at $54.00 up 0.27, with a projected two-day index of $54.21, up 0.21. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.