DTN Midday Livestock Comments 12/21 11:50

DTN Midday Livestock Comments 12/21 11:50 December Live Cattle Futures Surge Higher Midweek Strong morning support has developed in front-month live cattle and lean hog futures. This is helping to draw additional support into the entire complex, even though market activity remains sluggish and volume is likely to remain subdued through the end of the week. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Moderate to strong gains are seen in live cattle and lean hog futures with front-month contracts leading the market higher based on firming commercial buyer activity stepping back into the market. Little direction is seen in cash market activity through either the cattle or hog markets, although prices firmed from last week significantly on the Fed Cattle Exchange Auction. Corn prices are lower light in trade. March corn futures are 2 cents lower. Stock markets are lower in light trade. The Dow Jones is 11 points lower while Nasdaq is down 7 points. LIVE CATTLE: Strong gains have redeveloped in front-month December live cattle futures. Traders have pushed prices $1 per cwt higher through the morning, although the rest of the complex has seen much less aggressive buyer support during morning trade. Prices are steady to 35 cents per cwt higher at midday, with the underlying firmness still holding in the live cattle complex as traders look for firmness in cash markets through the end of the week. Cash cattle activity is starting to become more evident with feedlot bids developing at $109 to $110 per cwt in the South and $174 in the North. At this point there is no evidence of feedlot managers pulling the trigger, which may push active trade off until sometime Thursday. Asking prices are seen at $115 to $116 in the South and $178 o $180 in the North. Trade on the Fed Cattle exchange posted total sales of 2,860 head of the 5,317 head on show lists. Prices were seen from $110.50 to $113.50 per cwt with a sale average of $112.68 per cwt. This is $2 higher than last week, showing firmness through the complex, but may or may not have a significant impact in supporting feedlot trade through the end of the week. Beef cut-outs at midday are mixed, $2.28 higher (select) and down $1.34 per cwt (choice) with active movement of 100 total loads reported (48 loads of choice cuts, 17 loads of select cuts, 8 loads of trimmings, 26 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have bounced higher and lower through the entire morning as traders continue to focus on the potential to draw additional volume back into the market. At midday, feeder cattle futures are range bound in a narrow trading range from 25 cents lower to 10 cents higher. The overall lack of direction and inability to follow firm buyer support in live cattle markets is pointing to a sluggish market move through the end of the day, and likely the rest of the week. LEAN HOGS: Firm buyer support has quickly moved into the lean hog futures market through mid to late morning as traders have exhausted early selling pressure, and the strong support in cattle futures helped to spark additional buyer support in nearby contracts. Even though lean hog futures have now backed away from session highs, the tone of the market remains firm with the focus based on regaining a portion of Tuesday's losses. Overall volume remains extremely light in not only lean hog trade, but all livestock futures. This is allowing for even more price volatility through the complex. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.25 at $52.95 per cwt with the range from $45.50 to $53.50 on 4,015 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 143 loads selling with prices adding $0.43 per cwt. Lean hog index for 12/19 is at $58.14 up $0.09 with a projected two-day index of $58.18 up $0.04. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.