DTN Midday Livestock Comments 11/16 12:04

DTN Midday Livestock Comments 11/16 12:04 Cattle Futures Surge Higher Wednesday Morning Sharp gains quickly developed in cattle and hog futures trade Wednesday morning with triple-digit gains drawing additional commercial interest back into the market. December live cattle futures are holding $2 per cwt gains as prices quickly broke through short-term resistance levels of $106 per cwt. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp triple-digit gains have quickly moved into the cattle and hog market Wednesday morning with traders focusing on firming pork values in the cutout report, and strong commercial buying quickly developing and pushing through short term resistance levels. This has sparked additional widespread interest not only in spot-month contracts, but all nearby trade activity, and may help solidify fundamental interest through the end of the week. Corn prices are lower light trade. December corn futures are 2 cents lower. Stock markets are mixed in light trade. The Dow Jones is 82 points lower while Nasdaq is up 16 points. LIVE CATTLE: Lackluster movement early in the session was quickly dispelled as aggressive and active buyer support flooded into the complex through mid to late morning. This pushed front-month December contracts more than $2 per cwt higher as traders have quickly broken out of the recent short term trading range with price levels moving above $106 per cwt. December contracts are holding price levels at $107.62 at midday, sparking additional buyer support, as traders determine if current market gains will be able to hold through the end of the session. Cash cattle markets have started to develop with the Fed Cattle Exchange Auction selling over 12,500 head on the weekly sale with prices ranging from $103.25 to $108.25. These prices are $1 to $5 per cwt higher than last week's auction sales. A few scattered bids are seen in the South at $107 to $108 with bids in the north at $164 per cwt. Beef cut-outs at midday are mixed $0.36 lower (select) and up $0.57 per cwt (choice) with active movement of 158 total loads reported (95 loads of choice cuts, 26 loads of select cuts, 5 loads of trimmings, 32 loads of ground beef). FEEDER CATTLE: Triple-digit gains quickly developed in feeder cattle futures early Wednesday morning. The feeder cattle complex posted the initial market support in cattle trade midweek, but the carryover support quickly moved to live cattle trade, as markets fed off of each other through the morning and continue to ratchet higher through the trading session. November contracts remain essentially dead in the water, holding a 25 cent gain, but focusing on expiration Thursday as all attention is now being placed on January futures, which are trading $1.50 per cwt higher at midday. LEAN HOGS: Strong buyer support quickly stepped into nearby and deferred lean hog futures trade Wednesday morning as initial support was driven by short covering following early-week pressure. The early buyer activity sparked additional commercial interest in December contracts, which posted gains over $2 per cwt midmorning as active support pushed prices above $48 per cwt through much of the morning. The combination of strong pork value support in the morning cutout report and spill over interest from higher cattle prices is holding triple-digit gains across the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.62 per cwt to $40.05 per cwt with the range from $38.50 to $41.00 on 7,654 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.84 per cwt to $40.42 per cwt with the range from $38.50 to $41.00 on 2,011 head reported sold. The National Pork Plant Report reported 250 loads selling with prices gaining $2.04 per cwt. Lean hog index for 11/14 is at $48.38 down $0.08 with a projected two-day index of $48.31 down $0.07. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.