DTN Midday Livestock Comments 10/04 12:28

DTN Midday Livestock Comments 10/04 12:28 Cattle Futures Post Sharp Gains Tuesday Strong triple-digit gains have flooded into live cattle and feeder cattle contracts Tuesday morning with front-month October contracts leading the complex higher. Aggressive buying led by commercial buying has moved contracts off of long-term lows, as traders focus on rebuilding market support. By Rick Kment DTN Analyst GENERAL COMMENTS: Livestock futures have surged higher with sharp triple-digit gains holding in both live cattle and feeder cattle markets. The aggressive moves in nearby contracts have bounced off of contract lows, potentially establishing a market bottom, and drawing additional commercial and investment trade back into the complex. Corn prices are higher in light trade. December corn futures are 3 cents higher per bushel. Stock markets are mixed in light trade. The Dow Jones is 21 points lower while Nasdaq is up 4 points. LIVE CATTLE: Triple-digit market rallies have been seen through all nearby live cattle futures with October live cattle contracts holding gains over $2 per cwt at midday. The support has pulled back from midmorning gains as buyer interest has slowed slightly, but the interest remains strong through the entire complex. Traders appear to be focused that a market bottom may have been set Monday, creating additional momentum for traders to step back into the complex over the next couple of sessions. Limit higher moves are a strong possibility before the end of the session. Cash cattle activity remains undeveloped Tuesday morning with bids and asking prices yet to be seen by either side of the market. The wild shifts in futures markets should help to spark additional support in the cash markets by feedlot managers, but cash activity is likely to be delayed until the second half of the week. Beef cut-outs at midday are higher $0.56 higher (select) and up $0.58 per cwt (choice) with light movement of 70 total loads reported (29 loads of choice cuts, 22 loads of select cuts, 11 loads of trimmings, 8 loads of ground beef). FEEDER CATTLE: Sharp gains are holding across feeder cattle futures with October and November contracts trading above $3 per cwt with the focus on an extremely oversold market situation; traders have pushed October contracts above $127 per cwt, with November contracts near $123 per cwt at midday. That ability to hold current gains through the end of the session is likely enough of a spark to draw interest from commercial and investment traders back into the market midweek and potential spark additional longer-term buyer support. LEAN HOGS: Lean hog futures have bounced higher at midday as narrow support seen through most of the morning has gained additional momentum due to strong triple-digit support in cattle futures. December contracts are leading the market higher with prices moving above $45 per cwt once again. The potential that the recent market support could help to regain market interest and bring stability into the hog complex over the near future over the next week. Although fundamentals remain weak, renewed technical support could quickly develop if support is confirmed through the week after setting contract lows early this week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.61 per cwt, to $45.95 per cwt, with the range from $44.00 to $47.00 on 3,845 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 278 loads selling with prices adding $0.08 per cwt. Lean hog index for 9/30 is at $55.96, down 0.84, with a projected two-day index of $55.48 down 0.48. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.