DTN Midday Livestock Comments 12/01 11:54
Cattle Complex Slumps with Triple-Digit Losses at Midday
Live and feeder contracts are sharply lower near the top of the noon hour,
pressured by long liquidation and technical selling. Conversely, lean hog
futures are sharply higher, supported by ideas that fundamentals could steadily
improve through the end of the year.
By Rick Kment
Feedlot country is generally as quiet as a church library after hours. We
have seen a few bids in Nebraska at $195 dressed. Given last week's light trade
volume, pricing ideas should start to stir more aggressively by Wednesday or
Thursday. According to the midday report, the national hog base is $2 lower
compared with the Prior Day settlement ($47.00-$50.00, weighted average
$49.33). The corn trade seems to be fading from early highs at midday, though
nearby issues remain fractionally higher. Spillover support from the bean
market has lost its early punch. U.S. stocks are generally stronger, at least
temporarily ignoring discouraging manufacturing data in November. Near midday,
the Dow is 113 points higher with the Nasdaq better by 30.
After opening only moderately lower, live issues have steadily deteriorated
through the morning. Triple-digit losses now dominate the market thanks to spec
and commercial selling. The board appears to be running out of patience for the
late year cash market to improve. Beef cut-outs are lower at midday, off 0.09
(choice, $205.56) to $1.08 (select, $193.78) with light box movement (32 loads
of choice cuts, 10 loads of select cuts, 11 loads of trimmings, 12 loads of
For every back step taken in the live market this morning, the feeder trade
has reversed nearly three. Contracts are generally 175 to 362 lower at this
time, clobbered by commercial selling, technical bearishness, and a general
vacuum of buying interest.
Ignoring the bearish problems ripping through the cattle complex, lean
issues are sharply higher near midday. Most contracts are now in the black by
100 to 217 points. Bullish focus here is being helped by evidence supporting a
seasonal upturn, both in terms of country receipts and improving pork demand.
Carcass value at midday is modestly higher with higher belly, rib, and picnic
quotes overshadowing lower sales of fresh cuts and hams. Pork cut-out: $71.03,
off 0.69. CME cash lean 11/27: 55.62, off 0.12 (DTN Projected lean index for
11/30: 55.54, off 0.08).
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