DTN Midday Livestock Comments 01/24 12:16

DTN Midday Livestock Comments 01/24 12:16 Pressure Develops in Cattle Trade at Midday Moderate to strong pressure has replaced morning gains in cattle futures Tuesday morning. This is starting to shift the overall tone of the market on a short-term basis, but may limit market follow through in the coming days. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Moderate to firm pressure has quickly developed through cattle trade at midday. This has not only eroded early gains, but has reset the tone of the market Tuesday morning on the potential to close futures moderately to sharply lower. Hog futures remain slightly higher with buyer activity holding on based on firm pork values. Corn prices are lower in light trade. March corn futures are 6 cents lower. Stock markets are higher in light trade. The Dow Jones is 106 points higher while Nasdaq is up 24 points. LIVE CATTLE: Live cattle futures have pulled back from moderate gains seen during the morning. Even with strong support seen in boxed beef values, the overall support in nearby and deferred futures contracts quickly eroded at midday. Contracts are holding losses of 35 to 72 cents per cwt with front month futures backing away from the $120 per cwt price level seen through the morning. This could allow further market weakness to develop through the complex near closing bell. Cash cattle markets are quiet in light trade with little to no direction developing in the complex. There may be some initial bids developing through the end of the day, but for now, most packers seem to be waiting for additional futures market direction midweek. Trade may not be seen until late in the week with a possible Friday trade taking place around the cattle on feed report release. Beef cut-outs at midday are higher, $2.36 higher (select) and up $1.50 per cwt (choice) with light movement of 62 total loads reported (31 loads of choice cuts, 9 loads of select cuts, 6 loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: The inability to hold firm morning gains as traders moved back into the complex is creating some underlying concerns across all cattle trade. March futures are holding triple-digit losses, which is leading the market lower, and causing some traders to wonder just how much underlying support is in the feeder cattle complex at this point. Price shifts may continue to develop over the end of the session, but it appears that the weaker tone may continue. LEAN HOGS: Light gains continue to hold across lean hog futures despite the pressure in cattle markets during late morning. The focus on firming pork values and the overall stability of buyers moving into the market is likely to help support current levels through the end of the session. Nearby futures have pulled back from session highs, although the overall tone of the market remains firm with light to moderate gains seen in all contracts. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.38 at $62.33 per cwt with the range from $61.74 to $64.50 on 4,550 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 132 loads selling with prices gaining $0.52 per cwt. Lean hog index for 1/20 is at $67.03 up $0.02 with a projected two-day index of $67.20 up $0.17. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2017 DTN/The Progressive Farmer. All rights reserved.