DTN Midday Livestock Comments 01/26 12:27
Feeder Cattle Futures Hold Aggressive Losses
The inability to draw support from the bullish cattle on feed report has
sparked sharp expanded losses in feeder cattle trade. Even though cattle
markets remain under pressure, nearby contracts have backed off of session lows.
By Rick Kment
DTN Livestock Analyst
Aggressive pressure continues to hold in feeder cattle futures. There may be
continued buyers stepping back into the market. But the lack of activity at
midday could create some additional softness through the market. Corn prices
are lower in light trade. March corn futures are 2 cents per bushel lower.
Stock markets are mixed in light trade. The Dow Jones is 6 points lower while
Nasdaq is up 3 points.
Live cattle futures remain under pressure, although the focus on aggressive
triple-digit losses seems to have eased at midday. Traders are looking for
additional support from outside markets, but if selling activity slows, the
potential for late-day short covering may continue to spark additional
interest. Cash cattle activity is quiet with bids and offers undeveloped. Show
lists are generally mixed in an odd mixture of moves as Nebraska is showing
moderately lower offerings for the week. It is uncertain just how active trade
will be early in the week given the defensiveness of the market. Beef cut-outs
at midday are lower, $1.20 lower (select) and down $1.65 per cwt (choice) with
light movement of 73 total loads reported (40 loads of choice cuts, 10 loads of
select cuts, 10 loads of trimmings, 14 loads of ground beef).
Feeder cattle futures have taken advantage of expanded trading limits
despite pulling back away from the session lows. There is expected to be
additional softness through the rest of the session, although it is uncertain
just how much buying activity will remain through the complex through the end
of the session.
Strong early-week gains have continued to quickly develop through the lean
hog futures market. The aggressive pressure in the cattle market seems to be
the main draw to traders who are looking for a place to park investments for
the short term. Cash prices are unreported on confidentiality on the Iowa
Minnesota Direct morning cash hog report. The National Pork Plant Report is
reported 132 loads selling as prices adding $1.38 per cwt. Lean hog index for
1/22 is at $73.57 down 0.54, with a projected two-day index of $72.91 down
Rick Kment can be reached at firstname.lastname@example.org
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