DTN Midday Livestock Comments 01/04 11:41

DTN Midday Livestock Comments 01/04 11:41 Triple-Digit Losses Hold Feeder Cattle Futures Under Pressure Sharp losses have quickly developed in feeder cattle markets. The overall pressure in the feeder cattle trade is having very limited pressure on live cattle and lean hog markets. Overall trade volume is expected to remain sluggish through most of the session. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Light to firm buyer support in live cattle and lean hog futures is being offset by the pressure in feeder cattle markets. Overall market pressure has continued to flood into nearby feeder cattle markets despite long-term focus of supply tightness possible over the next few months. The concern of higher feed prices associated with gains in corn and soybean markets is limiting short-term buying activity. Corn prices are higher in light trade. March corn futures are 3 cents higher. Stock markets are higher in light trade. The Dow Jones is 48 points higher while Nasdaq is up 44 points. LIVE CATTLE: Trade in live cattle futures have been able to avoid the sharp losses across the feeder cattle market at this point with narrowly mixed trade seen in all live cattle futures. The ability to bring narrow gains to nearby contracts continues to focus on potential to spark additional cash market support as well as firm beef values in the wholesale market through early January. This will have a hard time sparking long term sharp buyer support, but may help to bring additional stability in the current market range. Cash cattle activity remains generally quiet in feedlot country as bids are becoming more evident with live bids seen at $116 per cwt. Active trade is not expected to be seen until sometime Thursday or Friday. Activity on the Fed Cattle Exchange Auction reported a total of 5,711 head, with 4,826 actually sold. State by state breakdown looks like this: KS 389 head at 117.00-117.25, NE 3,892 head at 115.50-117.00; TX 545 head, at 117.00-117.25; CO no test; IA no test; other states no test. The weighted average was 116.77, up from last week's weighted average of 115.38. Beef cut-outs at midday are higher, $1.51 higher (select) and up $1.51 per cwt (choice) with moderate movement of 90 total loads reported (42 loads of choice cuts, 19 loads of select cuts, 11 loads of trimmings, 19 loads of ground beef). FEEDER CATTLE: Sharp losses have quickly developed across feeder cattle markets early Wednesday. Triple-digit losses continue to hold across nearby feeder cattle markets as the inability to spark any buyer support continues to bring uncertainty to the entire complex. Market stability in live cattle futures could help to limit losses through the end of the session, but feeder cattle traders are also starting to put more focus in the renewed support of grain markets during early January trade. This could spark additional softness through the next couple of weeks. LEAN HOGS: Firm gains have developed through Wednesday morning with nearby contracts holding gains of 30 to 75 cents in reaction to the sharp losses seen across the complex Tuesday. The wide shifts higher and lower over the last week in lean hog futures continues to add even more uncertainty to start 2017. Trade remains extremely light as traders continue to focus on the direction of both cash market activity and pork value movement through the first couple weeks of January. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.96 at $51.72 per cwt with the range from $51.00 to $53.50 on 3,996 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 321 loads selling with prices falling $0.99 per cwt. Lean hog index for 12/29 is at $57.76 down $0.22 with a projected two-day index of $57.47 down $0.29. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2017 DTN/The Progressive Farmer. All rights reserved.