DTN Midday Livestock Comments 04/05 11:31

DTN Midday Livestock Comments 04/05 11:31 Triple-Digit Losses Slam Cattle Futures at Midday The cattle complex is sharply lower in late-morning trade, pressured by aggressive long liquidation and technical selling. On the other hand, lean hog contracts are moderately lower, cautiously supported by short-covering and profit-taking. By John Harrington DTN Analyst GENERAL COMMENTS: The cash cattle trade is at a standstill near midday with buyers and sellers confused in the face of sharply lower futures. Barring a sudden reversal in either futures or cutouts, significant cash business is not likely to develop until sometime Thursday or Friday. According to the midday report, the national hog base is $2.00 lower compared with the Prior Day settlement ($56.00-62.50, weighted average $61.69). Corn futures are up slightly at midday, 1 3/4 higher in the May and 1/2 higher in the December. LIVE CATTLE: After a modest round of short-covering on Monday, selling energy has returned to the cattle complex. New lows are being hammered this morning by aggressive long liquidation and technical selling. Open interest increased significantly last month, so we know that long liquidation could persist for an extended period of time. Disappointing boxed beef demand seems to be the primary reason why would-be spring bulls are currently throwing in the towel. Beef cut-outs are mixed at midday, off 0.21 (choice, $217.30) to up $3.66 (select, $209.89) with light to moderate box movement (48 loads of choice cuts, 14 loads of select cuts, 6 loads of trimmings, 13 loads of coarse grinds). FEEDER CATTLE: Like their live counterparts, feeder issues are imploding this morning with prices ranging from 242 to 420 lower. Besides bearish momentum stemming from the live market, feeders are under pressure thanks to poor commercial buying interest and disappointing feedlot margins. LEAN HOGS: Lean hog futures are holding moderate gains, generally up 12 to 42 points. The firm undertone seems to be tied to short-covering and profit-taking. However, the action seems rather lackluster, perhaps limited by spillover selling from the struggling cattle complex. The carcass value has opened with moderate strength as higher values for loins (+$1.60), picnics (+$2.17), ribs (+$2.93) and hams (+$0.64) overtook lower prices for butts (-$1.01) and bellies (-$0.01). Pork cut-out: $77.39, up 0.86. CME cash lean 04/01: 65.86, up 0.14 (DTN Projected lean index for 04/02: 66.00, up 0.14). John A. Harrington can be reached at john.harrington@dtn.com For more from John, see http://www.feelofthemarket.com/ (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.