DTN Midday Livestock Comments 12/20 11:54

DTN Midday Livestock Comments 12/20 11:54 Livestock Futures Fade Through Morning Trade Initial support seen in livestock markets was not enough to hold buyers interest through the rest of the session. Moderate to strong pressure has been seen through most nearby contracts as traders focus on position adjustments due to light trade volume and overall lack of interest in front of the Christmas holiday. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Livestock futures have turned swiftly lower following early market support which developed across the complex. The price pressure seen Tuesday is impacted by overall lack of volume in the market, and is more based on position taking and slow trade activity than any technical of fundamental factors moving into the market. Corn prices are lower light in trade. March corn futures are 3 cents lower. Stock markets are higher in light trade. The Dow Jones is 70 points higher while Nasdaq is up 21 points. LIVE CATTLE: Early gains seen in live cattle futures have quickly eroded once initial support worked through the complex. Nearby futures are steady to 99 cents per cwt lower Tuesday morning with pressure developing across the complex and the most aggressive losses seen in February contracts. Little activity is expected to be seen in the December contract as traders continue to roll to the February or April contract month. This move lower is expected to hold through the rest of the session, allowing for additional pressure to develop midweek. Cash cattle markets are still quiet Tuesday morning with bids unavailable at this point. A few asking prices have been uncovered in the South with prices expected to be seen around $115 to $116 for the week. It is likely to be the second half of the week, with Thursday trade likely ahead of the weekend. Beef cut-outs at midday are higher, $0.99 higher (select) and up $1.50 per cwt (choice) with light movement of 60 total loads reported (27 loads of choice cuts, 15 loads of select cuts, no loads of trimmings, 18 loads of ground beef). FEEDER CATTLE: Strong triple-digit losses have developed through feeder cattle futures as buyers seen early in the market which pushed prices higher have allowed the market to quickly erode due to lack of trade interest. Front month January futures have posted a $1 per cwt loss during late morning trade, with follow through pressure seen in most other contracts. The strong uptick in the market over the last month is leaving plenty of room for market correction, making these losses not technically significant at this point. LEAN HOGS: Market stability seen early in the session Tuesday has been replaced with moderate to strong pressure that has quickly developed across all livestock markets. Front month February futures are leading the market lower, posting a $1.37 per cwt loss and offsetting the triple-digit gains seen Monday in the front month contract. The rest of the complex is grouped in a much more confined and moderate trading range with prices 45 to 60 cents lower in all other nearby contracts. The lack of volume is the main driver of the pullback in price levels. This type of pressure will not create any bearish signals at this point, given the strong market rally over the last couple of weeks. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.13 at $52.77 per cwt with the range from $45.50 to $53.50 on 3,845 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $0.62 at $52.76 per cwt with the range from $45.50 to $53.50 on 625 head reported sold. The National Pork Plant Report reported 183 loads selling with prices adding $0.56 per cwt. Lean hog index for 12/16 is at $58.05 up $0.34 with a projected two-day index of $58.14 up $0.09. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.