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DTN Livestock Close: Futures Settle Moderately Lower

Ernst Undesser
By John Harrington DTN Livestock Analyst February 16, 2017

DTN Livestock Close: Futures Settle Moderately Lower

Lean hog issues closed lower with nearbys losing ground to deferred. Cattle futures drifted mostly lower in light trade volume.

 

 

Midday:  Activity levels through the livestock markets remain undirected with prices mixed across the complex. There is continued interest developing on the development of cash cattle trade at the end of the week.

By Rick Kment DTN Analyst

GENERAL COMMENTS:

Mixed trade is seen in all livestock trade Thursday morning. The back and forth market activity in both cattle and hog futures is indicating further lack of direction in the complex, and potential end of the week shifts that may break out of the current ranges over the next several days.

Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are lower in light trade. The Dow Jones is 16 points lower while Nasdaq is down 14 points.

LIVE CATTLE:

Mixed live cattle futures are holding narrow trading ranges after moving back from moderate pressure early in the session. Narrow support in nearby contracts focusing on the ability to draw support back into the beef value. Trade volume remains sluggish at midday, which could subdue additional market activity through the rest of the session.

Cash cattle markets remain untraded at this point, although more bids are starting to develop in both the North and the South. Prices in the South are seen once again at $116 per cwt, which may limit additional price activity through the rest of the day.

Bids are developing in the North at $185 to $186 dressed basis. Asking prices are seen at $122 in the South and $190 and higher in the North. Active trade is likely to still be delayed until Friday, but could trickle into the market in certain areas through the end of Thursday.

Beef cut-outs at midday are higher, $0.75 higher (select) and up $0.93 per cwt (choice) with moderate movement of 85 total loads reported (57 loads of choice cuts, 10 loads of select cuts, 1 load of trimmings, 17 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have come back from strong morning losses due to the overall lack of follow through seller support seen in the complex Thursday morning. Currently nearby feeder cattle trade is holding a mixed trading position with prices from 10 cents lower to 10 cents higher.

Deferred contracts continue to remain under strong pressure similar to where prices started out early in the session. But this activity in deferred contracts has more to do with lack of activity than current market direction.

LEAN HOGS:

Lean hog futures have shifted higher and lower in a moderate to wide trading range. The overall lack of direction in the complex continues to leave uncertainty in the entire market.

With April futures now taking over as front month contracts, there seems to be some pressure slowly developing across the market. May contracts remain unsupported, but over the next few months, the incredibly light open interest and volume in the May market will continue to skew trade direction and limit market clarity.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.44 at $71.67 per cwt with the range from $68.00 to $72.00 on 2,505 head reported sold.

Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report.

The National Pork Plant Report reported 132 loads selling with prices down $0.88 per cwt. Lean hog index for 2/14 is at $75.31 up $0.69 with a projected two-day index of $75.98 up $0.67.

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Ernst Undesser
By John Harrington DTN Livestock Analyst February 16, 2017