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DTN Livestock Midday: Futures Mixed in Wide Triple-Digit Range

Ernst Undesser
By Rick Kment DTN Analyst June 19, 2017

DTN Livestock Midday: Futures Mixed in Wide Triple-Digit Range

Sharp price range developing across livestock complex as triple-digit price swings create volatility through the market Monday morning. Cattle markets have turned lower, while aggressive buying has moved into the hog complex.

GENERAL COMMENTS:

Livestock futures are mixed in wide ranges with cattle markets posting aggressive triple-digit losses. Hog futures have posted significant buyer support based on a combination of technical and fundamental support.

Corn prices are lower in light trade. July corn futures are 5 cents lower. Stock markets are higher in light trade. The Dow Jones is 117 points higher while Nasdaq is up 77 points.

LIVE CATTLE:

Triple-digit losses continue to hold in live cattle futures. This weakness in the cattle market has held through the entire morning, even though prices have pulled away from session lows with front month June futures now trading $1 per cwt lower.

Deferred contracts are holding losses of $1.50 per cwt with consistent pressure across the complex as pressure remains weak although light volume through midday remains weak through the complex.

Cash cattle activity is completely undeveloped Monday morning with the focus on show list distribution following the weekend. Show lists remain larger which is expected given the lackluster activity in cash markets last week. Bids and asking prices are unavailable at this point and likely not going to be seen for a while given the volatility in the futures market.

The wide shifts between futures trade and beef values at this point may continue to keep cash markets from getting much business done until later in the week.

Beef cut-outs at midday are higher, $2.62 higher (select) and up $1.07 per cwt (choice) with light movement of 42 total loads reported (25 loads of choice cuts, 8 loads of select cuts, 5 load of trimmings, 4 loads of ground beef).

FEEDER CATTLE:

Sharp losses have continued to hold through the feeder cattle markets with still under pressure. Even though traders have backed away from session lows, the inability to draw buyer support back into the complex is helping to bring interest back to the market.

All nearby contracts are now trading at $2.75 per cwt losses with traders focusing on the pressure in live cattle markets and the additional weakness likely to develop through the rest of the trading session.

April through November feeder cattle futures are holding between $140 and $145 per cwt with the inability to focus on long term support in order to bring additional interest back into any nearby contract month.

LEAN HOGS:

Strong moves continue to be seen through hog trade as buyers remain focused on fundamental and technical support moving through the complex. This is helping to spark increased buyer support move into summer and fall contract months.

The ability to not only gain market activity in nearby contracts but sustain this buyer interest through the rest of the complex will likely help to bring additional trade activity back into markets in October and December contracts despite prices carrying a strong discount to the front month futures.

Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.67 at $85.30 per cwt with the range from $80.00 to $87.00 on 6,029 head reported sold.

Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $1.47 at $86.71 per cwt with the range from $80.00 to $87.00 on 2,970 head reported sold.

The National Pork Plant Report reported 112 loads selling with prices falling $0.41 per cwt. Lean hog index for 6/15 is at $84.06 up $1.13 with a projected two-day index of $85.32 up $1.26.

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Ernst Undesser
By Rick Kment DTN Analyst June 19, 2017