DTN Midday Livestock Comments 08/16 12:08

DTN Midday Livestock Comments 08/16 12:08 Cattle Futures Rally Back from Sharp Morning Losses Early pressure in the live cattle futures complex quickly put the market on the defensive as traders tried to keep pace with the most recent market softness. The ability to pull cattle trade away from morning lows is helping to create some needed stability into the market. By Rick Kment DTN Analyst GENERAL COMMENTS: Losses across the cattle complex have quickly shifted from strong early-morning pressure to mixed trade in live cattle futures. Lean hog futures remain under pressure as traders quickly and decisively back away from sharp triple-digit gains seen at the beginning of the week. Corn prices are mixed in light trade. September corn futures are 0.5 cent higher. Stock markets are lower in light trade. The Dow Jones is 39 points lower while Nasdaq is down 18 points. LIVE CATTLE: Live cattle futures have battled back from strong morning pressure to trade mixed in a narrow range at midday. The ability to hold prices near steady through the end of the session in nearby contacts would be considered a moral victory given the fact that strong pressure was seen early in the trading day and overall fundamentals are showing very little firmness as the week develops. Cattle traders have moved away from the shifts in the corn market and are now starting to focus on potential beef supply and demand through the end of August and through the next couple of months. This could limit additional buyer, but may bring market stability to the complex. Cash cattle activity remains generally light with just a few token starter bids developing in Texas and Nebraska. Bids of $118 per cwt live basis were seen in Texas, while dressed bids of $185 developed in the North through the morning. The fact that bids are available may not indicate that packers will become more aggressive, although overall trade last week remained generally light. This could put packers in a position where they need to buy cattle sooner than later. Asking prices are said to be seen around $122 in the South and $190 to $192 in the North, but this is no shock, as asking prices have remained in this range over the last three weeks. Beef cut-outs at midday are higher $0.08 higher (select) and up $0.47 per cwt (choice) with light movement of 72 total loads reported (31 loads of choice cuts, 26 loads of select cuts, no loads of trimmings, 14 loads of ground beef). FEEDER CATTLE: Moderate losses continue to hold across the complex as buyer interest remains sluggish at best. Although contract prices remain lower at midday, the ability to shift nearby and deferred contracts off of session lows seen midmorning is helping to bring some potential stability into the market. Traders focused on the slight to moderate gains in beef values Tuesday morning, and this helped to spark additional interest, and could bring additional buying into the market before closing bell. LEAN HOGS: Narrow losses are holding in most lean hog futures contracts although October futures continue to focus on adjusting markets lower after the aggressive gains seen Monday. The net result for the week even after morning pressure is still a strong price shift higher, which may be able to draw additional buyer support back into the market later in the week. The expectation of firming fundamental support through the next couple of days and increased chain speed in plants this week could spark additional buying activity. Cash prices are higher on the National Direct morning cash hog report. The weighted average price gained $0.22 per cwt to $62.89 per cwt with the range from $55.00 to $65.00 per cwt on 5,073 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.36 per cwt to $64.58 per cwt with the range from $61.75 to $65.00 per cwt on 2,630 head reported sold. The National Pork Plant Report reported 156 loads selling with prices falling $1.61 per cwt. Lean hog index for 8/12 is at $67.03, down 0.54 with a projected two-day index of $66.92 down 0.11. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.