DTN Midday Livestock Comments 02/17 11:59

DTN Midday Livestock Comments 02/17 11:59 Cattle Markets Surge Higher on Follow-Through Support Cattle futures continue to hold strong triple-digit gains based on follow-through buyer support after limit-higher gains in live cattle futures Tuesday and outside market buyer support redeveloping midweek. The depth of buyer support developing under these price levels is still uncertain, but price gains are still holding strong through midday, giving the potential for additional bullish support at closing bell. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp triple-digit gains have developed across the cattle complex with feeder cattle futures holding $3 per cwt gains at midday, while nearby live cattle futures are hovering at $2 per gains. The support across the entire livestock market continues to be once again driven by aggressive outside market support, as traders quickly try to assess overall market direction and keep pace with the fast movement of these outside segments. Corn prices are higher. March corn futures are 1 cent higher. Stock markets are higher in active trade. The Dow Jones is 242 points higher while Nasdaq is up 91 points. LIVE CATTLE: Live cattle futures are in a holding pattern at midday with gains at $2 per cwt in nearby contracts following support from outside markets able to bring additional buyer activity back to the complex following the limit gains Tuesday. But there has been little support above this level, and the concern is that it is unknown just how much buyer support is under this market at this point. If buyer support is fulfilled at these prices, will prices fall back at the end of the session, or will prices continue to move higher to expanded trading limits near closing bell similar to seen near the end of the session. Outside market support continues to be the main driver behind this market activity, which continues to draw buyers back into the complex. Cash cattle activity remains quiet Wednesday morning with asking prices still holding at $136 in the South. It is expected that the firmness of futures trade may continue to firm cash asking prices through the week, although both sides continue to remain silent at this point. Packer interest is expected to be more evident as the day progresses, although active trade is not expected until sometime Thursday or Friday. Beef cut-outs at midday are mixed, $0.79 lower (select) and up $1.44 per cwt (choice) with active movement of 104 total loads reported (49 loads of choice cuts, 14 loads of select cuts, 19 loads of trimmings, 21 loads of ground beef). FEEDER CATTLE: Buyer support remains extremely strong as aggressive outside market support has kick started additional trade activity once again in both live cattle and feeder cattle trade Wednesday morning. March futures are leading the charge higher with $3 per cwt gains pushing prices higher although the market remains focused on the ability to draw increased interest through the week based on fundamental support developing. It appears that there is enough depth to hold this support through the end of the session, but that is still uncertain, and will not be tested until closer to closing bell. LEAN HOGS: Firm nearby gains have developed through lean hog contracts at midday following aggressive strong cash market support as well as the ability for cattle markets to move and hold triple digit rallies through the morning. April futures are holding 45 cent gains at midday which is helping to create some stability through the complex and allow for traders to reevaluate underlying market support through the next couple of days. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.34 per cwt to $62.96 per cwt with the range from $60.81 to $65.00 per cwt on 4,865 head reported sold. Cash prices higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price added $1.15 per cwt to $64.81 per cwt with the range from $62.50 to $65.00 per cwt on 2,140 head reported sold. The National Pork Plant Report reported 258 loads selling with prices up $1.53 per cwt. Lean hog index for 2/15 is at $65.92 down 0.03, with a projected two-day index of $66.08, up 0.16. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.