DTN Midday Livestock Comments 05/19 11:49

DTN Midday Livestock Comments 05/19 11:49 Cattle Futures Turn Sharply Lower Widespread market liquidation developed through the cattle complex Thursday morning with triple-digit losses flooding into both live cattle and feeder cattle markets. This has led to widespread uncertainty through all markets during morning trade as the livestock complex remains defensive. By Rick Kment DTN Analyst GENERAL COMMENTS: Widespread losses have been seen through the livestock complex as sharp triple digit losses are holding in all cattle markets. Although live cattle and feeder cattle futures are well off of session lows seen at midmorning, the focus through the complex remains uncertain. Lean hog futures trade is eroding although volume remains extremely light, leaving uncertainty developing in nearby contracts based on lack of support in cash hog markets. Corn prices are lower. May corn futures are 12 cents lower. Stock markets are lower in light trade. The Dow Jones is 140 points lower while Nasdaq is down 49 points. LIVE CATTLE: Sharp losses continue to develop through the live cattle complex as traders quickly shift markets lower as they liquidate positions. The inability to continue the cash market support seen over the last couple of weeks seems to indicate that futures traders may be once again focusing on additional market uncertainty with losses nearing $2 per cwt at midday. Expanded losses through the end of the session could not only crease additional technical damage to the market, but would add even more insecurity to already soft fundamental market structures heading into the Memorial Holiday season. Cash cattle activity is generally quiet following light to moderate trade in the South Wednesday which was seen steady to $2 per cwt lower than last week's price levels. Bids of $205 are seen in the North, but this is still well below asking prices of $215. Additional trade may develop over the next couple of days but the general tone of the market may start to weaken given the softness in the market seen over the last day or so. Beef cut-outs at midday are mixed, $0.05 lower (select) and up $0.30 per cwt (choice) with light movement of 68 total loads reported (28 loads of choice cuts, 13 loads of select cuts, 9 loads of trimmings, 18 loads of ground beef). FEEDER CATTLE: Feeder cattle futures remain sharply lower at midday, but the complex has moved back well above session lows with traders holding losses of $1.50 to $2 per cwt. Earlier in the morning, losses developed near $3.25 per cwt as traders remained concerned about additional follow through liquidation through the rest of the complex. There may be additional losses quickly developing in the last couple hours of trade, but for now, trade volume has slowed, leaving markets relatively quiet, even though prices remain depressed. LEAN HOGS: Lean hog futures continue to hold light to moderate losses in nearby June and July contracts at midday, although deferred contracts are under more aggressive pressure based on concerns that long term demand support may continue to erode over the next several months. This is pushing October contracts $1 per cwt lower as traders continue to focus on pressure in both technical and fundamental factors through the middle of May. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.56 per cwt to $74.34 per cwt with the range from $68.00 to $76.00 per cwt on 2,552 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 141 loads selling with prices down $0.79 per cwt. Lean hog index for 5/16 is at $77.13, up 0.41 with a projected two-day index of $77.79, up 0.66. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.