DTN Midday Livestock Comments 02/22 11:46

DTN Midday Livestock Comments 02/22 11:46 Cattle Futures Show Early-Week Support Strong support has developed through live cattle and feeder cattle markets with traders focusing on the firmness in cash cattle trade last week as front month February futures test short-term resistance levels at $137 per cwt during moderate morning trade. Hog trade has remained light to moderate Monday morning, but buyer support is developing on firming outside markets. By Rick Kment DTN Analyst GENERAL COMMENTS: Aggressive triple-digit gains quickly flooded into the live cattle and feeder cattle market during early week trade. This helped to bring about additional market price support, as February live cattle futures are testing resistance levels of $137 per cwt. Feeder cattle futures continue to hold gains of $1.30 to $2.50 per cwt as traders step into late-summer and -fall contracts focusing on stronger longer-term demand support. Early narrow gains in lean hog support have slowly built support through the morning, allowing traders to regain ground following sharp losses last week. Corn prices are higher. March corn futures are 1/4 cent higher. Stock markets are higher in light trade. The Dow Jones is 215 points higher while Nasdaq is up 62 points. LIVE CATTLE: Strong gains have developed Monday morning after early morning apathy quickly wore off, creating triple-digit price gains that have been able to hold through midday. Nearby and deferred contracts have been able to hold gains of $1.50 to $1.70 per cwt as traders continue to focus on the ability to draw additional price support back into the beef market given the higher boxed beef values and cash cattle spending last week. Sustained support above $137 per cwt in February contracts will be watched extremely closely, as this may spark follow through buyer support through the rest of the week. Cash cattle markets remain quiet following the quiet cash cattle trade seen late last week. Even with light activity, it is not expected that cash business will develop until the second half of the week. Beef cut-outs at midday are higher, $0.77 higher (select) and up $1.55 per cwt (choice) with light movement of 69 total loads reported (42 loads of choice cuts, 11 loads of select cuts, no loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: Aggressive triple-digit buyer support is being driven by the strong live cattle support which is attempting to test short-term resistance levels in the February live cattle market. This is sparking gains above $2 per cwt in most feeder cattle contracts as traders are not looking past any uncertainty from the cattle on feed report, and now focusing on the potential of building long term spring and summer demand. The ability of tight supplies through the next several months continues to create firm buyer interest in all summer and fall contract months. LEAN HOGS: Light buyer support is developing in nearby lean hog futures following the strong triple digit gains which have flooded the cattle complex. The swift shift in market direction from the aggressive losses seen last week is helping to create some market support across the complex, as traders remain focused on both outside market direction as well as potential shift in cash hog price direction ahead of the Easter season. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.98 per cwt to $61.56 per cwt with the range from $54.00 to $63.50 per cwt on 3,792 head reported sold. Cash prices unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 171 loads selling with prices up $1.29 per cwt. Lean hog index for 2/18 is at $66.40 up 0.14, with a projected two-day index of $66.38, down 0.02. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.