DTN Midday Livestock Comments 10/19 11:52

DTN Midday Livestock Comments 10/19 11:52 Triple-Digit Losses Develop in Feeder Cattle Trade Moderate to strong pressure is seen through the cattle market Wednesday with feeder cattle futures swiftly adjusting lower as triple-digit losses hold in all contract months. Lean hog futures remain mixed based on light nearby buying offset by deferred market pressure limiting trade activity midweek. By Rick Kment DTN Analyst GENERAL COMMENTS: Increased pressure is steadily developing through cattle futures with triple-digit losses seen in both live cattle and feeder cattle markets at midday Wednesday. Lack of support in beef values continues to create concern surrounding the ability to rally beef demand through the fourth quarter. Hog futures remain mixed in a narrow trading range. The concern that further liquidation may develop is sparking light short covering, although follow-through pressure is holding in deferred contracts. Corn prices are higher in light trade. December corn futures are 3 cents higher per bushel. Stock markets are higher in light trade. The Dow Jones is 76 points higher while Nasdaq is up 2 points. LIVE CATTLE: Underlying pressure in feeder cattle futures Wednesday morning, softness in beef values on the morning boxed beef report and general trader apathy have finally wore down live cattle futures from the moderate losses seen through most of the morning as triple digit losses start to develop at midday. The most aggressive pressure is starting to be seen in early 2017 contracts, although pressure is evident through the entire complex. Following the strong gain which started last week, traders remain moderately comfortable within the current trading range, but the lack of support through the entire market continues to limit overall market activity and may lead to further liquidation. Cash cattle has started to develop interest Wednesday morning although sales have not yet developed. Bids are seen at $96 per cwt in the South and $153 in the North. Asking prices in the South remain at $100 to $102 with little changes seen through the morning. Active trade may be delayed until Thursday or Friday Beef cut-outs at midday are lower $0.75 (select) and down $2.60 per cwt (choice) with active movement of 124 total loads reported (69 loads of choice cuts, 33 loads of select cuts, no loads of trimmings, 22 loads of ground beef). FEEDER CATTLE: Strong triple-digit losses that developed through feeder cattle trade Wednesday morning have not surprised traders, given the lack of underlying support seen early in the week. But the inability to sustain a market rally for more than two or three trading sessions is becoming increasingly disappointing and pointing to the fact that the underlying market remains weak. January futures are leading the complex lower with losses reaching $2 per cwt at midday as further liquidation develops across all contracts. LEAN HOGS: Lean hog futures remain mixed in a narrow trading range through most contract months with December and February contracts holding narrow gains of 15 to 25 cents per cwt while the rest of the market has continued to erode lower through the morning. Similar market moves developed through the session Tuesday until near closing bell when widespread pressure developed through the entire complex, pushing all contracts lower. It is possible that the same situation may develop during the Wednesday session as very little outside market direction is detected to shift trader's movement at the end of the day. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.62 per cwt to $44.45 per cwt with the range from $44.50 to $47.00 on 5,838 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.14 per cwt to $46.22 per cwt with the range from $44.50 to $47.00 on 2,885 head reported sold. The National Pork Plant Report reported 232 loads selling with prices falling $0.17 per cwt. Lean hog index for 10/17 is at $52.36 up 0.06 with a projected two-day index of $52.57 up 0.21. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.