DTN Midday Livestock Comments 03/22 11:45

DTN Midday Livestock Comments 03/22 11:45 Cattle Futures Extend Aggressive Losses Tuesday Sharp losses continue to develop through the cattle complex as traders continue to liquidate positions the first two trading sessions of the week. Lean hog futures have stabilized early Tuesday and remain mixed in narrow trade following sharp $2 losses early in the week. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp losses have developed and held across live cattle and feeder cattle futures with traders quickly liquidating positions surrounding previous market losses and concerns of further widespread open interest losses through the rest of the lightly traded holiday week. Live cattle futures are holding $2.50 losses in nearby contracts, with the potential to move losses to daily limits before the end of the session. Corn prices are mixed. May corn futures are 1/4 cent higher. Stock markets are mixed in light trade. The Dow Jones is 4 points lower while Nasdaq is up 9 points. LIVE CATTLE: Sharp losses are once again seen in nearby and deferred contracts with April through August futures holding losses of $2.50 per cwt at midday. Deferred losses are less actively traded but holding losses under $2 per cwt at this point, and creating additional long term pressure. Long liquidation has developed as both commercial and investment traders are quickly backing away from the market following the strong rally in open interest over the last several weeks. The market pressure is likely to also be timed with end of month and quarter positioning, which may continue over the near future. Cash cattle activity remains undeveloped with bids undefined at this point and likely not to be well seen until midweek. Asking prices are hard to pin down at this point also, but a few asking prices are seen around $142 in the South. Beef cut-outs at midday are mixed, $0.40 higher (select) and down $0.33 per cwt (choice) with light movement of 54 total loads reported (25 loads of choice cuts, 11 loads of select cuts, 7 loads of trimmings, 11 loads of ground beef). FEEDER CATTLE: Follow-through liquidation has quickly developed through the feeder cattle futures market with losses of $2 to $2.50 per cwt holding through midmorning while front month March futures are holding $1 per cwt losses in very light trade. The focus on widespread combined liquidation between commercial and investors moving back away from the market following the rally last week is creating additional softness despite overall light trade volume. LEAN HOGS: After the one day of sharp losses in lean hog futures markets, trade across the entire hog complex market has moved back to directionless activity with prices mixed to slightly higher through the morning. It is uncertain at this point if the one day tumble was enough to satisfy traders concerns of weakness in market fundamentals, or if the overall light volume is postponing further market liquidation. Futures prices are mixed in a very narrow range from 5 cents lower to 15 cents higher. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.17 per cwt to $58.83 per cwt with the range from $53.00 to $61.50 per cwt on 3,150 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 187 loads selling with prices up $0.60 per cwt. Lean hog index for 3/16 is at $66.78, unchanged with a projected two-day index of $66.61, down 0.17. Lean hog index for 3/18 is at $66.19, down 42 with a projected two-day index of $66.00, down 0.19. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.