DTN Midday Livestock Comments 08/26 12:15

DTN Midday Livestock Comments 08/26 12:15 Aggressive Buying Develops in Hog Futures Livestock futures have turned extremely volatile Friday morning with strong triple-digit gains in the hog market creating additional concerns for cattle markets which have reacted to sharp triple digit losses. By Rick Kment DTN Analyst GENERAL COMMENTS: A wide price spread is seen Friday morning between cattle and hog futures given that each market is posting triple-digit price moves in opposite directions. Front-month hog futures are holding gains over $2 per cwt while feeder cattle futures are posting similar losses. Corn prices are lower in light trade. September corn futures are 4 cents lower. Stock markets are lower in light trade. The Dow Jones is 49 points lower while Nasdaq is down 2 points. LIVE CATTLE: Cattle futures have continued to erode through the morning with aggressive triple-digit losses seen through the market. Traders are focusing on sharp losses in feeder cattle markets. There may be additional losses seen through the rest of the day Friday, causing long-term pressure on the market and creating questions about underlying support levels. Cash cattle trade appears to be done for the week following movement of most cattle on Wednesday. This is allowing both sides to go back to the drawing board and assess the overall market situation before stepping into the market next week. Beef cut-outs at midday are lower $0.12 lower (select) and down $0.63 per cwt (choice) with light movement of 82 total loads reported (48 loads of choice cuts, 19 loads of select cuts, 6 loads of trimmings, 8 loads of ground beef). FEEDER CATTLE: Gains quickly developed across the cattle market Friday morning as traders seemed to jump on board with the support developing late in the week in lean hog futures. But this support quickly evaporated as sellers moved back into the market. Additional selling pressure has continued to be heaped on the cattle market with losses in nearby contracts reaching and exceeding $2 per cwt. The lack of end-of-week support may continue to pressure the market through the end of the day. LEAN HOGS: Active buyer support has quickly flooded back into the lean hog futures complex as traders look for additional longer-term market support in the complex. Fundamentals still remain bearish through the hog complex, which is creating some concern that this upward move may just be another one day shift higher, leading to even more volatility and potential pressure early next week. But the gains over $2 per cwt in front-month October futures cannot be totally ignored as traders have once again pushed prices over $60 per cwt. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.62 per cwt to $60.06 per cwt with the range from $54.50 to $61.00 per cwt on 3,292 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 153 loads selling with prices falling $0.22 per cwt. Lean hog index for 8/24 is at $67.04, up 0.05 with a projected two-day index of $66.90 down 0.14. Rick Kment can be reached at rick.kment@dtn.com (CZ) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.