DTN Midday Livestock Comments 11/04 12:13

DTN Midday Livestock Comments 11/04 12:13 Selling Pressure Continues to Push Livestock Futures Lower Nearby livestock futures have posted sharp triple-digit losses during morning trade as aggressive pressure continues to break through initial short-term support levels. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp losses continue to develop across the livestock complex. There remains strong pressure in the cattle market as nearby futures have quickly moved below initial support levels Friday morning. Corn prices are higher in light trade. December corn futures are 1/2 cent higher. Stock markets are higher in light trade. The Dow Jones is 33 points higher while Nasdaq is up 24 points. LIVE CATTLE: Live cattle futures have broken through initial short-term support of $103.32 per cwt, as aggressive triple-digit losses flooded into the market Friday morning. The pressure across the complex continues to create concerns surrounding short-term market direction, but also is now causing questions about support of market support seen in late October. Triple-digit losses are seen in all nearby contracts as trades continue to focus on lack of commercial support through the market, as well as weakness in market fundamentals. Outside market uncertainty is also starting to play a factor in commodity markets with the election next week likely to bring about some additional uncertainty. Cash cattle is reported in Texas with light activity seen at $104 per cwt. This would be $1 per cwt lower than Thursday's sales. Bids remain at $104 in the South and $162 per cwt in the North, but other areas are still undeveloped and not seeing any trade activity. The selloff on the futures trade may have dried up any desire to trade additional cattle for the week. Beef cut-outs at midday are mixed, with $0.12 lower (select) and up $0.28 per cwt (choice) with light movement of 65 total loads reported (40 loads of choice cuts, 14 loads of select cuts, no load of trimmings, and 12 loads of ground beef). FEEDER CATTLE: Developing pressure in live cattle contracts has continued to weaken feeder cattle trade with triple-digit losses seen across all contract months at midday. January futures continue to lead the market lower, holding a $2.27 per cwt loss, as traders focus the cattle market quickly backing away from the aggressive market support which developed during the last half of October. Trade continues to be within the current trade range, seen during the last week, but the inability to draw additional support and hold spot-month November contracts above $122 per cwt through the next week is likely to spark additional wide liquidation. LEAN HOGS: Additional strong losses have continued to develop in lean hog futures trade with December contracts losing $1.75 per cwt loss at midday. This has pushed contracts to $45.25 per cwt as traders continue to adjust to the lack of cash market support through the week as well as limited follow-through commercial buyer interest in futures trade. Even with the sharp losses seen during the last two sessions, the market still remains within the wide trading range set out during the last three weeks. This means that prices could continue to post wide price shifts without creating any technical market reaction. Outside the nearby contracts, deferred lean hog futures remain much less vulnerable to wide market swings, with prices holding narrow losses, but able to focus on potential long-term supply tightness through next summer. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.46 per cwt, to $42.71 per cwt, with the range from $41.00 to $44.00 on 3,266 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 179 loads selling with prices gaining $0.10 per cwt. Lean hog index for 11/2 is at $51.43, up $0.15, with a projected two-day index of $51.09, down $0.34. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.