DTN Midday Livestock Comments 11/24 12:06
Cattle Futures Slide Sharply Lower
Lack of support quickly overwhelmed the cattle complex Monday morning,
eroding initial support in nearby contracts. This drew additional pressure back
into the complex, which is embracing triple-digit losses in both live cattle
and live cattle contracts.
By Rick Kment
Wide price swings have quickly developed through the livestock complex with
aggressive triple-digit losses seen in both the live cattle and feeder cattle
market. Lean hog trade remains firm with buyer still holding with strong nearby
gains in tact, although gains are well off of early session highs. Corn prices
are lower in light trade. December corn futures are 3 cents per bushel lower.
Stock markets are mixed in light trade. The Dow Jones is 10 points lower while
Nasdaq is up 30 points.
Early support seen in live cattle futures was short-lived as pressure is
brewing in deferred contract months seemed to overtake the entire complex. This
has led to moderate to strong triple digit losses at midday as traders remain
concerned about short term buyer interest stepping back into the market ahead
of the holiday weekend. It is uncertain just how much impact the losses Monday
will have on the rest of the week, or fundamental market direction as feedlot
managers remain focused on recent market strength. Cash cattle markets remain
quiet although show lists are reported as generally larger for the week. It is
likely that both sides will desire to get sales recorded by the end of the day
Wednesday, but it is uncertain if this will happen. Asking prices and bids are
still not fully defined, although the initial tone if firmer than last week's
levels. Beef cut-outs at midday are higher, $0.25 higher (select) and up $1.18
per cwt (choice) with light movement of 65 total loads reported (26 loads of
choice cuts, 13 loads of select cuts, seven loads of trimmings, 19 loads of
Sharp losses have developed through the cattle complex as any limited
support seen in the early trade quickly eroding as additional volume stepped
back into the market. Traders are looking for additional direction through
late-day trade, although at this point it is going to be extremely difficult to
spark any interest from buyers to step back into the aggressively bearish
market tone. The higher than expected cattle placements are having a delayed
impact as traders once again look at the light volume that is stepping back
into the market.
Firm support is holding through the lean hog futures market with traders
focusing on the ability to draw traders back into the complex over the next few
days surrounding the holiday season. December contracts are leading the market
higher, with gains of $1.07 per cwt, although volume remains light, and is
likely to continue that way over the rest of the session. Cash prices are lower
on the National Direct morning cash hog report. The weighted average price fell
$1.28 per cwt to $83.83 per cwt with the range from $83.62 to $86.00 per cwt on
2,585 head reported sold. Cash prices are unreported due to confidentiality on
the Iowa Minnesota Direct morning cash hog report. The National Pork Plant
Report is reported 167 loads selling as prices gained $0.26 per cwt. Lean hog
index for 11/20 is at $88.86 down $0.09, with a projected two-day index of
$88.78 down 0.08.
Rick Kment can be reached at email@example.com
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