DTN Midday Livestock Comments 12/13 11:45
Cattle Futures Pull Back From Early Gains
Firm losses have quickly developed across the cattle complex with traders
focusing on the inability to draw additional commercial buyer interest back
into the market. This may spark additional weakness across the market through
the end of the day.
By Rick Kment
Strong pressure has redeveloped in cattle trade through the morning
Wednesday. This has quickly replaced the strong market surge seen early in the
session and is also eroding support seen early in the week. Mixed lean hog
futures trade is limiting additional market direction. Corn prices are higher
in light trade. March corn futures are 1 cent per bushel higher. Stock markets
are higher in light trade. The Dow Jones is 131 points higher, while Nasdaq is
up 22 points.
Moderate selling pressure has developed across all live cattle trade midday
Wednesday. This overall lack of support is not only creating some concerns that
traders are looking for follow-through stability after the previous market
gains but also may be now trying to adjust to renewed liquidation. Trade
remains sluggish at this point, although there is likely to be some additional
pressure developing through the end of the session. Cash cattle markets are
becoming more active midday Wednesday with live bids seen in all areas at $114
to $115 per cwt. This is steady to $1 per cwt higher than the few token bids
that developed Tuesday, but still well under asking prices of $119 to $120 per
cwt live basis. Activity for dressed trade remains undeveloped with bids and
asking prices still hard to find at this point in the week. The Fed Cattle
Exchange Auction today listed a total of 704 head, with 75 actually sold, 246
head listed as unsold, and 383 head listed as PO (Passed Offer). The
state-by-state breakdown looks like this: KS 318 total head, with 75 head sold
at $116.00, 59 head unsold, 184 head listed as PO ($116.00); NE 121 total head,
with zero head sold, 121 head unsold, and zero head listed as PO; TX 265 total
head, with zero head sold, 66 head unsold, and 199 head listed as PO ($116.00);
CO -- no cattle reported; IA -- no cattle reported; other states -- no cattle
reported. The delivery date/weighted average breakdown is as listed: 1-9 day
delivery: 704 head total, 75 head sold, with a weighted average price of
$116.00; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no
cattle reported; 17-30 day delivery -- no cattle reported. Beef cut-outs at
midday are lower, $0.11 lower (select) and down $1.05 per cwt (choice) with
active movement of 105 total loads reported (67 loads of choice cuts, 18 loads
of select cuts, 11 loads of trimmings, 10 loads of ground beef).
Feeder cattle futures have posted moderate to firm losses at midday after
giving back all of the early market support. The overall lack of direction in
the complex and concern that increased pressure may quickly sweep back into the
market through the end of the week has pulled back from the early week gains.
Feeder cattle futures are holding losses of 40 cents to $1.20 per cwt as trade
activity remains sluggish, but any sense of widespread support has evaporated
at this point.
Narrow trade ranges have continued to develop in lean hog futures following
the initial morning market shift. This has left prices generally unsupported,
and traders are looking for increased market direction through the morning with
prices hovering on either side of unchanged. The sharp pressure in pork values
and weakness in cash trade may add pressure to the complex over the near
future. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price is down $0.54 at $57.58 per cwt with the range from
$50.00 to $59.20 on 4,418 head reported sold. Cash prices are lower on the
Iowa/Minnesota Direct morning cash hog report. The weighted average price fell
$1.01 at $56.65 per cwt with the range from $50.00 to $58.00 on 1,848 head
reported sold. The National Pork Plant Report posted 307 loads selling with
carcass values falling $4.59 per cwt. Lean hog index for 12/11 is at $64.97
down $0.20 with a projected two-day index of $64.86, down $0.11.
Rick Kment can be reached at firstname.lastname@example.org
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