DTN Midday Livestock Comments 02/10 11:53

DTN Midday Livestock Comments 02/10 11:53 Moderate Gains Hold Through Live Cattle Trade Trade has slowed in cattle futures with the focus on early contract highs slowly eroding through the trading session. Moderate gains continue to hold in both live cattle and feeder cattle futures, while lean hog futures are showing moderate pressure. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle futures continue to trade higher at midday, but have given back a significant portion of early market support. This is creating some additional concern about the ability to draw additional late day support to the market and causing questions about how much underlying support is currently under the market at this point. Lean hog futures have broken away from the sideways pattern seen over the last week, with moderate pressure developing at midday. Corn prices are lower. March corn futures are 1/4 cents lower. Stock markets are higher in active trade. The Dow Jones is 66 points higher while Nasdaq is up 75 points. LIVE CATTLE: Gains continue to hold at midday, with February futures trading $1 per higher. The inability to build on early morning buyer support or even to maintain the initial interest seems to have created some underlying concern that market activity may follow the pattern seen Tuesday when markets closed mostly lower after holding strong early gains. It is uncertain just how much support or commercial interest is still under this market, leaving many to wonder where the tipping point is, and if prices will be able to move out of the current market range over the near future. Cash cattle is quiet, and expected to remain that way until sometime Thursday or Friday at this point unless something unexpected develops. A few bids are redeveloping in both the north and south on a live basis at $134 per cwt. Asking prices are around $138 to $140 in the South and $215 and higher in the North. Beef cut-outs at midday are higher, $0.29 higher (select) and up $0.83 per cwt (choice) with light movement of 90 total loads reported (45 loads of choice cuts, 17 loads of select cuts, no loads of trimmings, 27 loads of ground beef). FEEDER CATTLE: Strong gains continue to hold at midday across the feeder cattle, although gains have been cut to nearly 1/3 of levels seen early in the session. The inability for hold buyers in the market through the complex has been seen through the last couple of trading sessions. A mixed close at the end of day Wednesday could bring more uncertainty and lack of support to the market, but the wide intraday price swings have created quite the momentum through the week. LEAN HOGS: Hog futures turned lower in most contracts with moderate to strong pressure developing Wednesday morning as traders are concerned about a moderate pullback in deferred contracts. Front month February contracts are still holding onto narrow gains, but the rest of the complex is trading under pressure at midday with weakness in cash markets through the morning and the inability to move out of the recent sideways pattern has seemed to get most traders bored of hanging on for the time being. April futures are leading the complex lower with $1.15 per cwt losses, although if traders limit the market pullback to this level, additional buyer interest could quickly step back into the market later in the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.37 per cwt to $60.73 per cwt with the range from $52.00 to $63.00 per cwt on 2,494 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $2.07 per cwt to $60.93 per cwt with the range from $52.00 to $63.00 per cwt on 240 head reported sold. The National Pork Plant Report reported 250 loads selling with prices down $0.34 per cwt. Lean hog index for 2/8 is at $64.89 up 0.27, with a projected two-day index of $65.29, up 0.40. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.