DTN Midday Livestock Comments 10/21 11:43

DTN Midday Livestock Comments 10/21 11:43 Strong Early Gains Continue to Hold in Cattle Futures Cattle futures posted strong early support Friday morning in reaction to limit higher live cattle trade Thursday. The early movement of traders helped to push prices $2 to $2.80 per cwt higher in nearby live cattle contracts. Hog markets posted firm gains as late-week buying quickly moved into nearby and deferred contract months. By Rick Kment DTN Analyst GENERAL COMMENTS: Strong triple-digit gains have held through the morning Friday with October and December live cattle futures holding gains of $2.60 to $2.80 per cwt at midday. The lack of market activity developing across the complex through most of the morning is creating some caution, indicating extremely light volume, and the potential for wide late-day price adjustments. Lean hog futures remain firmly higher with December contracts posting gains over $1 per cwt as support from the aggressive cattle market has spilled into the hog complex. Corn prices are higher in light trade. December corn futures are 2 cents higher per bushel. Stock markets are mixed in light trade. The Dow Jones is 41 points lower while Nasdaq is up 8 points. LIVE CATTLE: Live cattle futures continue to post aggressive market gains midday Friday with two day market totals in nearby contracts nearing $6 per cwt gains. At this point, current support is still limited by October highs creating moderate resistance for the market, but the potential to move prices through these levels could spark additional commercial support through the last week of October. October and December live cattle contracts are holding gains of $2.65 to $2.80 per cwt midday Friday with firm buyer support holding. The inability to spark additional strong buyer interest since the first hour of trade indicates that light activity level, and can cause reason for concern in the last hour of trade. Cash cattle markets are quiet Friday morning with bids seen in the South at $98 per cwt and $154 in the North. At this point, it is likely that trade may be delayed until after the afternoon cattle on feed report. The light steady trade in the North Thursday, combined with aggressive follow-through support in futures trade points to additional cash market support once the dust clears. Asking prices are seen Friday morning at $100 to $102 in the South and $159 in the North. Beef cut-outs at midday are mixed $0.16 lower (select) and up $2.08 per cwt (choice) with light movement of 66 total loads reported (39 loads of choice cuts, 18 loads of select cuts, no loads of trimmings, 10 loads of ground beef). FEEDER CATTLE: Traders are quickly adjusting prices higher across all feeder cattle futures. All but October contracts are posting gains of $2 per cwt or greater at midday as the renewed support in the live cattle complex has created underlying support through the market. Currently traders expect additional little bearish news to develop from the cattle on feed report Friday afternoon as any pre-report adjustments appear to be focused on the expectation that supply side numbers will be steady to lower than early report projections. LEAN HOGS: Strong triple-digit gains have quickly developed Friday morning across December lean hog futures as traders continue to focus on the aggressively oversold spot month contract, but have just now found enough support to draw prices more than slightly higher. December lean hog futures are holding gains of $1.20 per cwt at midday, pushing prices to $42.30 per cwt. A close at this level of higher would post a gain in the weekly price chart, offsetting the strong market pressure seen through most of the week. The concern through the week has been the inability for gains to hold through the end of the trading sessions. This could once again be the case Friday, but with more aggressive price support midday Friday, it is going to take a significant market turnaround to erode current market support within the next two hours. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.86 per cwt to $44.58 per cwt with the range from $42.50 to $46.00 on 2,995 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 139 loads selling with prices adding $1.50 per cwt. Lean hog index for 10/19 is at $52.66 up $0.09 with a projected two-day index of $52.49 down $0.17. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.