DTN Midday Livestock Comments 05/23 12:06

DTN Midday Livestock Comments 05/23 12:06 Limit Losses Develop Across Cattle Complex The cattle complex is locked in limit losses in most contract months through live cattle and feeder cattle futures Monday afternoon. Spot month futures are showing triple-digit losses, but not limit losses at this time, although all other nearby futures have been locked in daily trading limits for most of the morning. Hog futures remain under pressure due to lack of underlying market support. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp limit losses have quickly flooded through the cattle market with daily trading limits stopping trade activity in most contracts through the morning. This is keeping prices locked $3 per cwt lower in live cattle trade while feeder cattle market are $4.5 per cwt lower. Corn prices are higher. May corn futures are 3 cents higher. Stock markets are higher in light trade. The Dow Jones is 20 points higher while Nasdaq is up 10 points. LIVE CATTLE: Sharp losses have quickly developed across the live cattle market. This has led to limit losses of $3 per cwt in August through February futures with other contracts testing those limits at midday. A close at these limits would create expanded trading limits of $4.50 per cwt on Tuesday, creating the potential for additional market volatility through the early part of the week. Not only are traders concerned about the growing supplies available to the market, but the lack of demand for beef heading into the Memorial Day weekend and summer season is causing great concern for the beef market as a whole. Cash cattle markets are quiet with little to no direction expected to be seen through the first half of the week, and likely trade will be delayed until late in the week before the holiday weekend. Showlists are lighter with asking prices and bids still undeveloped at this point Monday. Beef cut-outs at midday are mixed, $0.18 lower (select) and up $0.20 per cwt (choice) with light movement of 59 total loads reported (23 loads of choice cuts, 16 loads of select cuts, 6 loads of trimmings, 15 loads of ground beef). FEEDER CATTLE: Limit losses are holding in August through January futures based on the increased cattle placements seen in the cattle on feed report Friday. The combination of lackluster beef demand over the last few weeks as well as overall sluggish market concerns of uncertain upcoming seasonal and holiday market support is causing traders to pull even further away from the market. LEAN HOGS: Lean hog futures continue to steadily chip away at market prices with moderate losses holding at midday as traders seem to be unable to show much interest in the aggressive limit losses in the cattle complex. But it is still unable to draw any market spreading activity as seen in previous weeks where traders have moved the hog market in the opposite direction of the cattle complex. The overall lack of support in technical or market fundamentals have kept buyers away from the market, allowing traders to slowly but steadily back from the market over the last week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.05 per cwt to $73.62 per cwt with the range from $67.00 to $74.00 per cwt on 2,803 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 205 loads selling with prices up $0.92 per cwt. Lean hog index for 5/19 is at $78.81, up 0.38 with a projected two-day index of $78.93, up 0.12. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.