DTN Midday Livestock Comments 05/04 11:54

DTN Midday Livestock Comments 05/04 11:54 Sharp Pressure Developing in Deferred Cattle Futures Strong losses have developed across late 2016 cattle contracts as traders remain concerned about longer-term supply-and-demand issues. The focus on short-term stability has brought light buying into nearby contracts, although the overall tone of the market remains weak. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle futures have bounced higher and lower through the morning based on narrow trading volume, although the overall tone in the market continues to be based on lack of fundamental activity in the market. Lean hog futures remain firm fundamentally but are holding strong nearby losses as traders square positions midweek. Corn prices are mixed. May corn futures are 1 cent lower. Stock markets are lower in light trade. The Dow Jones is 106 points lower while Nasdaq is down 39 points. LIVE CATTLE: Even though moderate gains continue to hold in nearby live cattle futures at midday, the lack of follow through support across the complex has continued to limit overall buyer support across the market. This has allowed for strong losses to develop across the back end of live cattle futures trade, focusing on the pressure seen in the feeder cattle complex. Mixed trade is likely to be seen through most of the complex, although at the end of the session, there is likely to be some additional market shifts due to extremely light trade volume in the market. Cash cattle activity is generally quiet with a few bids starting to circulate in the North. These prices are listed at $188 to $190 per cwt dressed basis and $120 live basis, although the overall tone of the market remains soft given the overall lack of commitment through the market over the last couple of weeks. It is likely to be the end of the week before active trade develops. Beef cut-outs at midday are lower, $0.80 lower (select) and down $0.02 per cwt (choice) with active movement of 138 total loads reported (72 loads of choice cuts, 26 loads of select cuts, 11 loads of trimmings, 29 loads of ground beef). FEEDER CATTLE: Sharp losses have now developed through the feeder cattle complex with the focus on deferred contracts as November markets are holding a $1.80 per cwt loss. The lack of support across the market continues to focus on the inability to draw buyer support into live cattle futures as well as redevelop cash cattle or beef value support back into the market going into the summer months. LEAN HOGS: Firm pressure has continued to develop through the morning as traders continue to focus on short-term liquidation in nearby contracts. June futures are leading the complex lower, with a 90 cent tumble at midday, while the rest of the complex is limited to narrow losses of 20 to 40 cents per cwt. The lack of follow-through support is not surprising, but increased buyer activity may slowly develop just before closing bell. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.38 per cwt to $68.61 per cwt with the range from $68.47 to $71.50 per cwt on 2,656 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 254 loads selling with prices down $0.37 per cwt. Lean hog index for 4/29 is at $71.77, up 0.64 with a projected two-day index of $71.77, up 0.66. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.