DTN Midday Livestock Comments 10/03 12:15

DTN Midday Livestock Comments 10/03 12:15 Feeder Cattle Futures Surge Higher Midday Monday Feeder Cattle Futures late Monday morning rallied higher with October contracts posting gains near $3 per cwt in reaction to buyers stepping back into the complex. Buyers have moved back into other livestock futures contracts, although volume remains light to moderate, creating questions about the ability to sustain gains. By Rick Kment DTN Analyst GENERAL COMMENTS: Livestock futures have regained buyer support at midday as traders have backed away from sharp losses which left live cattle and lean hog futures with limit losses Friday and traded under pressure early Monday. Firm support is starting to develop through the complex at midday although there is uncertainty as to just how much follow-through support can develop through the end of the session. Corn prices are higher in light trade. December corn futures are 7 cents lower per bushel. Stock markets are lower in light trade. The Dow Jones is 73 points lower while Nasdaq is down 22 points. LIVE CATTLE: Light to moderate gains have developed at midday, although the tone of the market is still sluggish through the morning, despite the aggressive triple-digit surge in feeder cattle markets at midday. October contracts are holding a narrow gain at midday with prices still holding prices under $100 per cwt with the concern that additional long term pressure may continue to develop through beef market fundamentals. The potential to string together several firm but consistent gains over the next several trading sessions could help to rebuild buyer support through the entire complex. Cash cattle markets are quiet with bids and asking prices undeveloped and likely to remain that way until near midweek. Active trade may be delayed until the second half of the week. Beef cut-outs at midday are lower $0.97 lower (select) and down $0.74 per cwt (choice) with light movement of 70 total loads reported (41 loads of choice cuts, 14 loads of select cuts, 13 loads of trimmings, 3 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have rallied sharply higher at midday after firm support has quickly swept back into the complex. The movement in the market is focused on front month futures which is pushing front month October contracts $2.97 per cwt higher at midday as the rest of the complex is holding gains of $1.65 to $1.80 higher. Trade remains moderate through the complex, although the overall firmness in the market and lack of seller interest seen in late morning is pointing to renewed buyer activity clearly seen across the entire market. LEAN HOGS: Narrowly mixed trade has continued to develop through the October and December complex with the focus on holding contracts near contract lows, although buyers are attempting to slowly step back into the market, but with only limited success. Strong buyer activity is seen in the deferred market with triple digit gains pushing prices as much as $2.30 per cwt higher. This could drive prices to additional gains through the end of the session as contracts have extended limits of $4.50 per cwt Monday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.07 per cwt to $47.12 per cwt with the range from $44.00 to $47.15 on 2,877 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 173 loads selling with prices adding $0.80 per cwt. Lean hog index for 9/29 is at $56.80 down 0.55 with a projected two-day index of $55.96 down 0.84. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.