DTN Midday Livestock Comments 02/08 12:07

DTN Midday Livestock Comments 02/08 12:07 Cattle Futures Limit Lower Monday Limit Losses Hold Cattle futures under pressure as traders focus on further weakness develops through the complex. A close at current levels will create expanded trading limits in both feeder cattle and live cattle trade Tuesday, allowing the potential for even more market volatility as the week continues. By Rick Kment DTN Analyst GENERAL COMMENTS: Limit losses are holding through cattle trade late Monday morning. The focus through the complex continues to be driven by lack of support seen in outside markets combined by concern from pressure late last week. Lean hog futures are mixed in moderate ranges as traders have shied away from cattle shifts. Corn prices are lower. March corn futures are 2 cents lower. Stock markets are lower in active trade. The Dow Jones is 308 points lower while Nasdaq is down 99 points. LIVE CATTLE: Live cattle futures are locked limit lower in all 2016 contract months with February and April 2017 contracts currently still just under the trading limit, but flirting with the daily limit. The lack of support through the complex is not surprising given the lack of buyer support seen late last week and market volatility over the last couple of months; the traders remain focused on the ability to shift price levels within the wide trading range over the last couple of months without significantly breaking through limits. Lack of fundamental direction in the market continues to allow for technical gyrations in this wide range, and further distancing price shifts in futures trade from moves in the cash market. Cash cattle markets are undeveloped with bids and asking prices still unavailable and likely to remain that way through the first half of the week. Showlists are mixed with offerings higher in all areas except for Nebraska. The lack of activity last week should keep packers short bought, but packers are well accustomed of being in this position which all but guarantees early week business. Beef cut-outs at midday are mixed, $0.73 higher (select) and down $0.89 per cwt (choice) with light movement of 66 total loads reported (42 loads of choice cuts, 9 loads of select cuts, no loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: The aggressive triple-digit losses which started to develop Friday, have quickly stepped back into the market Monday morning with the feeder cattle futures trading at or near limit losses through the morning. March through May futures are locked limit lower with $4.50 per cwt losses while the rest of the complex is flirting with these levels at midday. A close limit lower would allow for expanded trading limits Tuesday, causing the potential for further pressure as prices could move $6.75 per cwt during the session. LEAN HOGS: The aggressive pressure in cattle markets and outside markets have allowed for additional softness to develop in deferred lean hog futures through late morning. Although the overall tone of the hog complex has remained surprisingly resilient through early week trade with Monday activity with February futures posting a 32 cent per cwt rally. Other spring and summer contracts are holding 30 to 50 cent losses, but compared to the rest of the livestock market, this softness is considered to be insignificant at this point. Traders continue to focus on potential support for cash market activity later in the month, which could help to spark additional market support. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.07 per cwt to $61.39 per cwt with the range from $58.00 to $63.50 per cwt on 4,731 head reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price gained $0.68 per cwt to $63.08 per cwt with the range from $58.00 to $63.50 per cwt on 2,023 head reported sold. The National Pork Plant Report reported 180 loads selling with prices down $0.47 per cwt. Lean hog index for 2/4 is at $64.30 up 0.32, with a projected two-day index of $64.62, up 0.32. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.