DTN Midday Livestock Comments 12/28 11:48

DTN Midday Livestock Comments 12/28 11:48 Buyers Quickly Push Cattle Futures Higher Wednesday Strong gains have developed through the cattle complex midday Wednesday. The renewed buyer support seen in the complex, offsets the light pressure seen early in the session with strong triple-digit support holding in both live cattle and feeder cattle trade. Lean hog futures are mostly lower backing away from Tuesday's gains. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Livestock futures are mixed with cattle trade posting strong morning gains, while the lean hog futures has eroded quickly through Wednesday morning. Overall trade volume remains light, which is no surprise given the holiday weekend on either end of the week and limited trader interest through the end of the year. Corn prices are higher in light trade. March corn futures are 5 cents higher. Stock markets are lower in light trade. The Dow Jones is 64 points lower while Nasdaq is down 37 points. LIVE CATTLE: Triple-digit gains have slowly developed through midday in live cattle futures. This has continued to drive additional buyer support into the market and may spark additional support later through the trading session. December futures remain extremely lightly traded with the soon to expire contract quickly loosing open interest. But December futures continues to lead the higher prices through late morning trade with a gain of $1.35 per cwt at midday. The overall tone of the market remains firm, although the light trade volume could bring additional market volatility. Cash cattle markets are quiet through feedlot country without a token bid developing at this point. Asking prices remain undeveloped also, but it is expected that interest will increase through the end of the day and day Thursday. The Fed Cattle Exchange Auction report today listed a total of 4,786 head, with 4,464 actually sold. The state by state breakdown looks like this: KS 150 head at 116.00-116.25, NE 3,973 head at 115.00-116.50; TX 267 head, at 116.75; CO no test; IA no test; other states 74 head at 114.50 in South Dakota. The weighted average was 115.38, up from last week's weighted average of 112.68. Beef cut-outs at midday are higher, $1.96 higher (select) and up $2.90 per cwt (choice) with light movement of 79 total loads reported (49 loads of choice cuts, 17 loads of select cuts, 5 loads of trimmings, 8 loads of ground beef). FEEDER CATTLE: Following moderate to strong pressure over the previous two trading sessions, break out buying quickly moved back into the feeder cattle market. This has allowed for strong nearby contract support as January futures are holding a $1.90 per cwt gain at midday. Trade volume remains sluggish through the entire complex, as traders remain focused on the potential to bounce back from pressure seen in the cattle on feed report Friday. LEAN HOGS: Initial gains through the lean hog complex were short lived as traders continue to focus on follow-through pressure in the market. The overall lack of support seen during the midweek session has continued to drive additional softness into the market with February contracts still hanging onto moderate gains, but the rest of the complex slipping quickly under general market pressure and lack of end-of-year buying support. The concern that the increased hog inventory will continue to weigh on overall price levels through early January is eroding the thinly traded market. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.03 at $51.75 per cwt with the range from $44.50 to $52.03 on 4,158 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 226 loads selling with prices adding $0.12 per cwt. Lean hog index for 12/23 is at $58.14 down $0.04 with a projected two-day index of $57.95 down $0.19. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.