DTN Midday Livestock Comments 09/08 12:03

DTN Midday Livestock Comments 09/08 12:03 Cattle Market Struggle For Support Cattle futures are trying to struggle for life early Thursday as triple-digit losses have flooded into the live cattle and feeder cattle markets. The lack of buyer support continues to cast a dark shadow on the long-term market outlook of the beef market. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle futures have posted sharp losses Thursday morning. Hog markets have become the bright spot of the livestock market brought about by firming pork values in the morning report. Corn prices are higher in light trade. September corn futures are 4 cents per bushel higher. Stock markets are lower in light trade. The Dow Jones is 47 points lower while Nasdaq is down 27 points. LIVE CATTLE: Live cattle futures continue to turn lower Thursday morning with aggressive triple-digit losses quickly returning to the market. The lack of follow-through support in the market has not only backed away from gains seen Wednesday, but erased most if not all of the support seen during the midweek session. The inability to hold the support seen just one day prior gives evidence of just how weak the market is and how overall fundamental softness can lower futures traders' expectations. The potential push below $100 in October contracts could create additional pressure in all nearby and deferred contracts, creating spillover pressure. Cash cattle activity is starting to develop with bids seen in the south and the north areas, although prices are sharply lower with bids currently seen at $103 to $104 live basis and $163 to $166 dressed basis. The likelihood that prices will get back close to cash market levels of dressed prices of $170 per cwt paid in the North are slim given the pressure in futures trade and lack of support in beef values through late week. It is likely that cash market activity will continue to develop over the next couple of days with market imploding at lower prices as feeders try to minimize losses. Beef cut-outs at midday are lower $0.49 lower (select) and down $0.84 per cwt (choice) with active movement of 94 total loads reported (62 loads of choice cuts, 23 loads of select cuts, 2 loads of trimmings, 9 loads of ground beef). FEEDER CATTLE: Initial buyer support at opening bell Thursday morning was short lived as traders quickly backed away from buying activity that jumped into the market midweek. Once selling started to develop, the market never turned back, and triple-digit losses have held through the complex. Feeder cattle futures are holding losses of $2.50 to $3 per cwt at midday with the concern of additional late-day pressure developing later in the session and potentially taking out additional market support. A break below $130 per cwt in September contracts would indicate not only a contract low, but also significant momentum shift that may have a dramatic impact on the overall outcome on the overall cattle market through the next several weeks. Market fundamentals remain extremely weak, which continues to create uncertainty as to where traders will pull strength over the coming days and weeks. LEAN HOGS: Strong gains have quickly redeveloped through nearby lean hog futures trade as October lean hog futures support is being driven by the support in pork values as well as the potential for additional commercial support flocking to the market through the end of the week. The lack of support in the cattle complex has made it even more attractive for investment trades to look at hog contracts even if it is for a short period of time. But this is helping to create market security and stability near $62 per cwt in the October contract. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.40 per cwt to $57.91 per cwt with the range from $52.00 to $60.00 on 5,845 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.74 per cwt to $58.31 per cwt with the range from $52.00 to $58.50 per cwt on 763 head reported sold. The National Pork Plant Report reported 196 loads selling with prices gaining $2.32 per cwt. Lean hog index for 9/6 is at $64.51 down 0.38 with a projected two-day index of $64.16 down 0.35. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.