DTN Midday Livestock Comments 09/27 11:39

DTN Midday Livestock Comments 09/27 11:39 Cattle Futures Test Limit Losses Tuesday Morning Triple-digit losses quickly developed through the cattle complex as liquidation flooded into the complex. October live cattle are locked in daily trading limit losses of $3 per cwt at midday, while lean hog futures are mixed in a narrow range. By Rick Kment DTN Analyst GENERAL COMMENTS: Wide triple-digit losses have flooded into the cattle complex with limit losses of $3 per cwt seen in front-month October live cattle futures. This has quickly turned the entire cattle market lower and created concern through the entire livestock complex. Lean hog futures remain mixed in light trade with very little movement seen through the complex. Corn prices are higher in light trade. December corn futures are 1 cents higher per bushel. Stock markets are higher in light trade. The Dow Jones is 138 points higher while Nasdaq is up 41 points. LIVE CATTLE: October live cattle futures bounced off of daily limit lows of $103.82 late morning Tuesday as sharp losses continue to hold across all nearby contracts. The aggressive pressure continues to be seen in the market with traders pulling back from week ago market highs. Even though prices are still nearly $4 per cwt above contract lows set in early September, the aggressive tone seen during the last two market sessions has quickly damaged the market structure and could quickly change the price direction through the rest of the month. A close at limit losses of $3 per cwt would expand limits Wednesday in live cattle futures, potentially creating even more volatility in the already wild market structure. Cash cattle markets are starting to start to develop with a few starter bids trickling into the South at $104 while asking prices are seen at $110 per cwt. Bids and asking prices are still quiet in the North with activity potentially delayed in all areas delayed until the second half of the week. Beef cut-outs at midday are higher $0.47 higher (select) and up $1.74 per cwt (choice) with light movement of 66 total loads reported (26 loads of choice cuts, 15 loads of select cuts, six loads of trimmings, 20 loads of ground beef). FEEDER CATTLE: Lightly traded September feeder cattle futures remain 45 cents lower while the rest of the complex is holding aggressive triple-digit losses following the entire cattle complex lower as traders remain under pressure. October feeder cattle futures seem to set the pace, essentially taking over as front-month contract months holding losses of $3.50 to $4 per cwt through late morning with prices trading near $127 to $127.50 per cwt. A close at these levels will have broken though support levels set in early September, and likely lead to additional liquidation through the rest of the month. LEAN HOGS: Trade in the hog complex has been locked in a mixed but narrow trading range through the morning as the focus in the livestock market has been quickly shifted to the panic selling taking place in the cattle complex that has developed through the entire morning. October lean hog futures have held narrow gains during the entire morning, while December and February futures have shifted between narrow gains and losses during the morning between shifting trade activity while traders seem to become locked within the narrow range between contract lows and market resistance which is limited by weak fundamentals. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 180 loads selling with prices falling $0.90 per cwt. Lean hog index for 9/22 is at $59.88 down $0.60 with a projected two-day index of $58.93 down $0.95. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.