DTN Midday Livestock Comments 01/18 12:00

DTN Midday Livestock Comments 01/18 12:00 Cattle Futures Gain Support Thursday Aggressive triple-digit gains have developed midday Thursday morning in both feeder cattle and live cattle contracts. The underlying support seen in late-week trade may spark additional follow through support across the cattle complex. Rick Kment DTN Analyst GENERAL COMMENTS: Active gains in feeder cattle futures Thursday morning have quickly caught the attention of all cattle markets. Nearby feeder cattle contracts are trading nearly $3 per cwt higher at midday, creating follow through optimism as well as technical support across all cattle trade. Nearby live cattle futures are quickly following the pattern of the feeder cattle market, trading $1.50 to $2 per cwt higher at midday. Hog futures remain mixed in a narrow to moderate trading range due to limited morning volume and lack of fundamental directional changes at this point. March corn is up 1 1/2 at $4.438 and March soybean meal is down $1.00 at $357.7. The Dow Jones Industrial Average is down 83.74 at 37,182.93. LIVE CATTLE: Live cattle futures are quickly following the pace of aggressive buying interest moving into feeder cattle futures Thursday morning. Although gains are still well under the levels realized in feeder cattle futures, all live cattle contracts are holding triple-digit gains with the focus on nearby contracts testing $2 per cwt gains at midday. Traders are also starting to adjust positions ahead of Friday's Cattle on Feed Report. This may add some additional volatility to the market both in front of and after the report. Cattle on feed estimates are expected to be 102% of year-ago levels, which at this level, would put total feedlot inventory below 12 million head. If reports come in significantly higher than these expectations, then traders are likely to become less optimistic about short and long-term supply consolidation. Cash cattle markets still remain quiet Thursday morning with limited activity still seen in most areas. Asking prices seen over the last couple of days of $174 to $175 in the South still are holding, but given the bullishness of futures trade feeders are likely to start increasing these asking prices, as they focus on steady to higher cash trade by the end of the week. Bids are undeveloped but likely to become more evident over the next day. With Friday's cattle on feed report, it is very possible that the cash trade could be delayed until after the report. February live cattle are $1.88 higher at $174.975, April live cattle are $2.15 higher at $177.775 and June live cattle are $1.80 higher at $174.60. Boxed beef prices are mixed: choice down $1.54 ($296.91) and select up $0.23 ($283.25) with a movement of 66.82 loads (46.61 loads of choice, 7.10 loads of select, 3.74 loads of trim and 9.37 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have soared higher in morning trade with gains of $2 to $3 seen across most nearby contracts. The optimism seen over the past few days, combined with fundamental and technical support redeveloping in nearby contracts is helping to solidify buyer support. Traders are looking for a solid move through the end of the week and will closely be monitoring the cattle on feed placement number which is expected to be lower than year-ago levels. January feeders are $2.70 higher at $231.125, March feeders are $2.90 higher at $232.675 and April feeders are $2.70 higher at $237.90. LEAN HOGS: Lean hog futures remain quiet and generally out of the spotlight Thursday morning with all of the trade activity and energy seen in cattle markets. Prices are mixed in a narrow to moderate trading range from 30 cents lower to 50 cents higher, although overall volume still remains extremely limited. Additional afternoon trade may help to add additional support to the complex, although prices are likely to remain stuck in the current trading range through the end of the session. February lean hogs are $0.30 lower at $71.15, April lean hogs are $0.50 higher at $78.475 and May lean hogs closed steady. Hog Prices are higher on the Daily Direct Morning Hog report, up $2.06 with a weighted average of $47.9, ranging from $47.00 to $48.00 on 4,935 head with a five-day rolling average of $47.08. Pork Cutouts totaled 188.14 loads with 167.31 loads of pork cuts and 20.83 loads of trim. Pork cutout values are up $1.59 at $87.89. Rick Kment can be reached at kmentrick@gmail.com (c) Copyright 2024 DTN, LLC. All rights reserved.