DTN Midday Livestock Comments 10/05 12:12

DTN Midday Livestock Comments 10/05 12:12 Cattle Futures Shift Higher in Light Buying Firm nearby gains develop in cattle contracts midweek in live cattle futures as traders confirm additional trade support. Lean hog futures have turned sharply lower with nearby contracts breaking through long-term support levels. By Rick Kment DTN Analyst GENERAL COMMENTS: Live cattle futures have moved back into the complex with October live cattle futures leading the move higher with a 95 cent per cwt gain. This sustained market support is more manageable that the triple digit gains seen Tuesday, but may continue to draw increased support back into the market. Lean hog futures remain sharply lower as December contracts broke through long term support. Corn prices are higher in light trade. December corn futures are 1/4 cents higher per bushel. Stock markets are higher in light trade. The Dow Jones is 124 points higher while Nasdaq is up 38 points. LIVE CATTLE: Mixed trade is seen in live cattle futures with October contracts leading the move higher with a 95 cent gain holding at midday. The support seen Tuesday has helped to draw additional buyer interest back into the complex, with potential additional long term buyer activity developing. This may bring increased long term buyer activity into the market and push prices back into ranges where additional commercial traders will quickly jump back into the market. Cash cattle remains sluggish midweek with a few starter bids developing Wednesday morning. But bids are still well below asking prices and likely not to generate much if any interest at this point. Bids are seen at $102 live basis in the South and $98 to $100 in the North, while $158 per cwt dressed bids in the north are seen. Asking prices are seen at $105 to $106 in the South live basis, as trade is not expected to develop until Thursday or Friday at this point. Beef cut-outs at midday are lower $0.83 lower (select) and down $0.53 per cwt (choice) with active movement of 101 total loads reported (35 loads of choice cuts, 25 loads of select cuts, 17 loads of trimmings, 23 loads of ground beef). FEEDER CATTLE: Mixed trade has been seen through feeder cattle futures through the morning Wednesday with contracts moving back and forth with very little sense of direction. Moderate gains quickly give way to strong losses through the session. But the inability to sustain any one position for an extended period of time has allowed prices to shift back and forth several times through the morning. Feeder cattle futures are currently holding moderate to strong pressure despite firm buyer support seen in live cattle trade at midday. It is uncertain if the live cattle activity will be able to draw buyers back into the feeder cattle contracts, or if this may lead to additional late day pressure. LEAN HOGS: Lean hog futures have quickly fallen through support levels as prices tumbled below $43 per cwt during morning trade in the December contracts with triple digit losses holding across most contract months. The lack of support in the complex continues to put pressure in the market and raise questions as to just where support will develop in the market as December contracts have traded as low as $41.10 per cwt through late morning. Contracts have backed away from contract lows at midday, although markets still remain under significant pressure as traders look for additional fundamental losses to be seen through the rest of the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.47 per cwt to $45.09 per cwt with the range from $43.00 to $46.00 on 2,983 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 288 loads selling with prices adding $1.23 per cwt. Lean hog index for 10/3 is at $55.48 down 0.48 with a projected two-day index of $54.85 down 0.63. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.