DTN Midday Livestock Comments 09/13 12:02

DTN Midday Livestock Comments 09/13 12:02 Hog Trade Plummets Lower Hog futures have posted aggressive losses through the morning Tuesday as very little support has developed across the entire complex. This has limited the ability for buyers to step into the market. Cattle futures are looking for protection with uncertainty from hog market moves and previous cattle gains are keeping buyers cautious. By Rick Kment DTN Analyst GENERAL COMMENTS: Hog futures have tumbled sharply lower Tuesday morning as aggressive pressure has quickly developed through the morning with traders expanding contract lows and creating concerns of additional market pressure through the fall. Cattle markets remain under pressure backing away from previous gains seen earlier in the week. Corn prices are lower in light trade. September corn futures are 6 cents per bushel lower. Stock markets are lower in light trade. The Dow Jones is 253 points lower while Nasdaq is down 69 points. LIVE CATTLE: Live cattle futures have bounce back from triple-digit losses at midday as firm support has developed in boxed beef values, and is supporting the renewed support seen over the past two trading sessions in the live cattle complex. The aggressive triple-digit slide in lean hog futures is also having a carryover impact in live cattle trade as some are concerned that this may limit additional buyer interest later in the month. Cash cattle activity is quiet with bids and asking prices remaining generally undefined with very little movement expected until midweek or later. A few cattle have been priced in the South at $110 or higher, but given the pressure in futures trade, it is not likely that any significant volume will develop until Thursday or Friday. But the last couple of weeks have been evidence that traditional wisdom cannot always be used when it comes to wide price swings in cash market activity. Beef cut-outs at midday are higher $0.94 higher (select) and up $0.96 per cwt (choice) with light movement of 77 total loads reported (31 loads of choice cuts, 22 loads of select cuts, 7 loads of trimmings, 18 loads of ground beef). FEEDER CATTLE: Feeder cattle losses have been trimmed at midday from early levels as midday trade is at $1 to $1.25 per cwt lower, while losses early in the session were seen $2 to $2.70 per cwt lower. Based on lack of underlying support through the entire complex and concern that widespread follow through pressure would continue to develop. It is uncertain if buyer support will hold the narrow losses through the end of the session, but if traders can end the session within the narrow triple digit losses, following the aggressive market pressure, it may be considered a moral victory given the lack of support early in the trading session. Even though no support is seen in grain markets, early in the week feeder cattle markets are gaining no value from outside markets at this point, as the direction of the market is coming from the focus of trade activity in lie cattle markets. LEAN HOGS: Continued weakness has flooded into the lean hog futures market through the morning with triple digit losses seen during the morning. Although lean hog futures are not at limit losses at this point, the potential that these limit losses could still step back into the market setting additional contract lows could spark even more market pressure through the second half of the month and further fundamental and technical pressure during the next couple months. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.53 per cwt to $55.82 per cwt with the range from $52.00 to $57.25 on 4,653 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 172 loads selling with prices gained $1.01 per cwt. Lean hog index for 9/9 is at $64.07 down 0.13 with a projected two-day index of $63.95 down 0.12. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.