DTN Midday Livestock Comments 08/25 11:55

DTN Midday Livestock Comments 08/25 11:55 Hog Futures Tumble Lower Thursday Lean hog contracts remain unsupported with triple-digit losses quickly moving into the complex. The pressure across all livestock markets remains extremely evident during the morning Thursday despite moderate support in beef and pork values in morning reports. By Rick Kment DTN Analyst GENERAL COMMENTS: Triple-digit losses have redeveloped in lean hog and feeder cattle futures with traders focusing on the potential of weakness in grain markets as sparking larger short- and long-term production. Live cattle futures continue to hold narrow losses due in part to moderate gains in boxed beef values. Corn prices are lower in light trade. September corn futures are 3 cents lower. Stock markets are mixed in light trade. The Dow Jones is 5 points lower while Nasdaq is up 8 points. LIVE CATTLE: Narrow price shifts have held Thursday morning in all live cattle futures as traders have quickly looked past the pressure in the cash cattle trade, and focus on the potential of bringing some much needed stability back into the cattle complex. Firming beef values helped to limit selling pressure, although overall tone of the market remains weak. Nearby prices are holding 7 to 25 cent per cwt losses, with traders looking for slightly improved beef values to continue through the end of the week. Cash cattle trade may be done for the week following the light to moderate activity that took place late Wednesday. Prices on cattle sold are seen mostly $3 lower than last week in the South and $5 per cwt lower in the North. Even lower bids are being floated Thursday morning with bids in the North at $179 per cwt. Beef cut-outs at midday are higher $0.62 higher (select) and up $0.84 per cwt (choice) with light movement of 53 total loads reported (25 loads of choice cuts, 16 loads of select cuts, 8 loads of trimmings, 4 loads of ground beef). FEEDER CATTLE: Last minute position shifting is being done in August feeder cattle futures which expire at noon during the day. This market shift accounts for the only positive price moves through the complex. The rest of the market is holding strong losses with nearby futures holding triple-digit losses. Trade through the feeder cattle futures complex remains extremely light, allowing for even more price volatility through the complex. Traders continue to focus on the price spread between live cattle and feeder cattle markets, which may spark additional pressure through the market over the coming weeks in order to better support fed cattle margins. LEAN HOGS: Additional widespread market weakness has quickly developed through lean hog trade Thursday morning with triple-digit gains holding in most contract months. Front month October contracts are showing the most aggressive pressure, falling $1.55 per cwt lower as traders remain clearly aware of the lack of support through market fundamentals. Even though narrow support in pork values in the morning pork cutout report was unable to draw active support back into the market. Even though prices are holding slightly above lows set in early August, the potential to break through this support level could bring about additional widespread liquidation. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.85 per cwt to $61.36 per cwt with the range from $59.50 to $62.50 per cwt on 4,327 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.73 per cwt to $61.83 per cwt with the range from $61.75 to $62.50 per cwt on 1,814 head reported sold. The National Pork Plant Report reported 128 loads selling with prices gaining $0.61 per cwt. Lean hog index for 8/23 is at $66.99, up 0.03 with a projected two-day index of $67.04 up 0.05. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.