DTN Midday Livestock Comments 02/12 12:08
Cattle Prices Slide Lower Friday Morning
Traders are preparing for the three-day holiday weekend as Markets will
remain closed Monday in observance of Presidents Day. Cattle futures have
eroded lower through the morning despite early-morning buyer interest stepping
into the market. This lack of support is creating concern about long-term
support and focusing on the cash cattle market pressure seen over the past two
By Rick Kment
Moderate pressure has developed Friday morning as early morning buyer
support was unable to hold in both live cattle and feeder cattle markets. Lean
hog futures are advancing support which started Thursday, based on stability in
market fundamentals. Trade is expected to remain sluggish through the rest of
the complex, which could limit market ranges at closing bell. Futures markets
will remain closed Monday for President's Day, opening Tuesday. Corn prices are
lower. March corn futures are 0.5 cent lower. Stock markets are higher in
active trade. The Dow Jones is 245 points higher while Nasdaq is up 56 points.
Follow-through pressure has developed through the entire live cattle futures
market as early buyer support has quickly eroded Friday morning. The concern
that the pressure in cash markets will continue to add pressure through the
rest of the month despite the tightening beef supplies is creating additional
underlying concerns in both nearby and deferred contracts. But live cattle
futures remain technically stuck within a wide trading range, which may
continue to keep prices wandering higher and lower through most of the spring.
Cash cattle activity has developed through the morning with trade in the South
likely to be essentially wrapped up for the week with trade seen at $133. This
is $3 per cwt lower than last week and $1 lower than trade Wednesday. A few
deals are starting to trickle in in the North at $206, which would be around $4
per cwt lower than last week, but mostly bids are still holding at this level.
Trade may be done by the end of the day, given the defensiveness of futures
markets and outside market pressure. Beef cut-outs at midday are lower, $1.00
lower (select) and down $0.35 per cwt (choice) with light movement of 61 total
loads reported (40 loads of choice cuts, 12 loads of select cuts, no loads of
trimmings, 10 loads of ground beef). Cash cattle markets remain quiet following
moderate to active trade Thursday with prices $3 to $4 per cwt lower than last
The inability to hold early market support through feeder cattle contracts
has sparked additional pressure in summer contracts, with May and August
futures holding $1 per cwt losses. The lack of support in cash markets as well
as lackluster interest in live cattle markets has limited additional buyer
interest across the entire feeder cattle complex.
Light trade volume through the end of the week is limiting overall market
direction through the entire lean hog complex. This is unable to bring
additional seller pressure into nearby contracts, as February through July
futures continue to hold moderate gains at midday, firming buyer interest at
the end of the week. The strong pressure seen in outside markets earlier in the
week has had the most impact on deferred contracts, pushing late fall and
winger contracts moderately lower through the end of the trading session
Friday. Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $1.90 per cwt to $61.06 per cwt with the range
from $52.00 to $62.50 per cwt on 3,463 head reported sold. Cash prices
unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog
report. The National Pork Plant Report reported 135 loads selling with prices
up $0.38 per cwt. Lean hog index for 2/10 is at $65.60 up 0.31, with a
projected two-day index of $65.91, up 0.31.
Rick Kment can be reached at email@example.com
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