DTN Midday Livestock Comments 03/23 11:39

DTN Midday Livestock Comments 03/23 11:39 Cattle Futures Backing Away From Early Support Wednesday Buyers quickly stepped into the cattle market Wednesday morning, helping to draw additional gains into live cattle and feeder cattle markets. But this support was quickly dashed as seller interest redeveloped and has extended through the day, pushing prices lower. By Rick Kment DTN Analyst GENERAL COMMENTS: Moderate losses have developed through cattle futures trade Wednesday. The inability to hold early gains in both live cattle and feeder cattle futures markets has continued to create market pressure through late morning. Lean hog futures remain stuck in a narrowly mixed trading range with the exception of front month April lean hog futures which are holding 55 cent losses based on softness in cash markets. Corn prices are lower. May corn futures are 3 cents lower. Stock markets are lower in light trade. The Dow Jones is 27 point lower while Nasdaq is down 34 points. LIVE CATTLE: Moderate pressure has developed through the live cattle futures complex at midday as nearby and deferred contracts are holding losses of 40 to 60 cents per cwt. Early buyer activity quickly developed across the cattle market due to the extremely light trade volume, but once additional trade activity stepped into the market, prices slipped lower, settling into this price range seen at midday. The lack of support in beef values in the morning report may add additional pressure at the end of the trading session, with concerns that further widespread market liquidation may develop through the complex. Cash cattle activity is generally light with a few bids developing through the morning Wednesday at $135 in the South and $216 in the North. Asking prices are at $140 to $141 in the South and $223 and higher in the North. It is still expected that most trade will be delayed until Thursday or Friday. Beef cut-outs at midday are mixed, $0.42 higher (select) and down $1.23 per cwt (choice) with moderate movement of 82 total loads reported (39 loads of choice cuts, 18 loads of select cuts, 10 loads of trimmings, 15 loads of ground beef). FEEDER CATTLE: Early gains which quickly developed were unsupported as traders continue to focus on market uncertainty and the inability to draw additional buyers back into the market midweek. Feeder cattle futures have continued to erode through midday, with deferred contracts posting the most aggressive losses, holding 60 to 80 cent losses in April through August contracts as traders focus on the lack of firmness in live cattle markets at this point. The concern that investment interest which recently returned to the market is quickly once again exiting the complex may keep markets soft through the near future, allowing for further price pressure over the near future. LEAN HOGS: April lean hog futures continue to lead the market lower with 55 cent losses holding at midday, as traders are focusing on the pressure in cash markets through midweek. The lack of fundamental support across the hog complex in the entire market at this point is creating increased concern throughout the entire market even though traders in all other contracts have moved prices back to a narrowly mixed price shift. The light to moderate pressure is likely to be seen through the market over the rest of the session, driven by softness in cattle futures. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.53 per cwt to $58.96 per cwt with the range from $58.72 to $61.00 per cwt on 2,986 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 215 loads selling with prices up $0.17 per cwt. Lean hog index for 3/21 is at $66.00, down 0.19 with a projected two-day index of $65.89, down 0.11. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.