DTN Midday Livestock Comments 12/17 12:02
Feeder Cattle Losses Lead Complex Lower
Sharp losses have quickly developed across all livestock trade. Strong
losses of $2 per cwt or greater in nearby feeder cattle futures is leading the
entire complex lower with spillover weakness seen in all adjoining contracts.
By Rick Kment
Strong pressure is seen through all livestock trade. The shift lower in
feeder cattle futures is posting triple digit losses in all traded contracts
through the morning Monday. This pressure is sparking follow through weakness
in live cattle and lean hog futures. Corn markets are lower in light trade.
March corn futures are 1 1/4 cent lower. Stock markets are lower in light
trade. Dow Jones is 202 points lower with Nasdaq down 44 points.
Moderate losses are seen in nearby live cattle trade with midday pressure
holding at 50 to 70 cents per cwt lower. The overall lack of support in feeder
cattle futures is putting even more pressure on the entire complex as traders
are focusing on late-summer contracts to carry the brunt of the latest push
lower in feeder cattle markets. This is pushing August 2019 contracts $1 per
cwt lower with long term concerns of beef demand growth while beef supplies may
continue to remain readily available. Cash cattle markets remain undeveloped
with bids and asking prices yet to be established. Show list distribution and
inventory taking will continue to be the main focus Monday. It is not expected
that trade will develop until later in the week. Boxed Beef cut-outs at midday
are higher, $0.95 higher (select) and up $1.33 per cwt (choice) with light
movement of 52 total loads reported (26 loads of choice cuts, 12 loads of
select cuts, 6 loads of trimmings, 7 loads of ground beef).
Sharp triple-digit losses are seen in all feeder cattle contracts with
nearby contracts holding losses of $2 per cwt or greater. The overall lack of
support in the entire livestock market has quickly and aggressively sparked
renewed buyer activity through the entire complex. There is increased volume
moving into the market during early week trade, as traders hover near $145 per
cwt in limited activity through the Monday session. Little to no new market
direction is seen from the live cattle complex, allowing traders to focus on
growing uncertainty which is adding even more pressure to the complex.
Strong market pressure has quickly developed through lean hog futures Monday
morning. The focus is seen both in fundamental and technical pressure in nearby
contracts with April futures leading the complex lower with triple-digit losses
at midday. Even though these losses are well off of early session lows, the
break below $70 per cwt has created additional market bearishness to flood the
complex. Even with this technical breakdown in the complex, prices are still
well above November lows near $67 per cwt, and could bring some additional
support at these levels. Cash prices are currently unavailable on the National
Direct morning cash hog report. Cash prices are unavailable on the
Iowa/Minnesota Direct morning cash hog report. Pork carcass values are
unreleased at this time. Lean hog index for 12/12 is $55.17, down 0.19, with a
projected two-day index is $55.13, down 0.04.
Rick Kment can be reached at firstname.lastname@example.org
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