DTN Livestock Midday: Cattle Futures Pull Back From Early Gains

Firm losses have quickly developed across the cattle complex with traders focusing on the inability to draw additional commercial buyer interest back into the market. This may spark additional weakness across the market through the end of the day.

GENERAL COMMENTS:

Strong pressure has redeveloped in cattle trade through the morning Wednesday. This has quickly replaced the strong market surge seen early in the session and is also eroding support seen early in the week. Mixed lean hog futures trade is limiting additional market direction.

Corn prices are higher in light trade. March corn futures are 1 cent per bushel higher. Stock markets are higher in light trade. The Dow Jones is 131 points higher, while Nasdaq is up 22 points.

LIVE CATTLE:

Moderate selling pressure has developed across all live cattle trade midday Wednesday. This overall lack of support is not only creating some concerns that traders are looking for follow-through stability after the previous market gains but also may be now trying to adjust to renewed liquidation. Trade remains sluggish at this point, although there is likely to be some additional pressure developing through the end of the session.

Cash cattle markets are becoming more active midday Wednesday with live bids seen in all areas at $114 to $115 per cwt. This is steady to $1 per cwt higher than the few token bids that developed Tuesday, but still well under asking prices of $119 to $120 per cwt live basis. Activity for dressed trade remains undeveloped with bids and asking prices still hard to find at this point in the week.

The Fed Cattle Exchange Auction today listed a total of 704 head, with 75 actually sold, 246 head listed as unsold, and 383 head listed as PO (Passed Offer). The state-by-state breakdown looks like this:

  • KS 318 total head, with 75 head sold at $116.00, 59 head unsold, 184 head listed as PO ($116.00);
  • NE 121 total head, with zero head sold, 121 head unsold, and zero head listed as PO;
  • TX 265 total head, with zero head sold, 66 head unsold, and 199 head listed as PO ($116.00);
  • CO — no cattle reported;
  • IA — no cattle reported;
  • other states — no cattle reported.

The delivery date/weighted average breakdown is as listed:

  • 1-9 day delivery: 704 head total, 75 head sold, with a weighted average price of $116.00;
  • 1-17 day delivery — no cattle reported;
  • 10-17 day delivery — no cattle reported;
  • 17-30 day delivery — no cattle reported.

Beef cut-outs at midday are lower, $0.11 lower (select) and down $1.05 per cwt (choice) with active movement of 105 total loads reported (67 loads of choice cuts, 18 loads of select cuts, 11 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have posted moderate to firm losses at midday after giving back all of the early market support. The overall lack of direction in the complex and concern that increased pressure may quickly sweep back into the market through the end of the week has pulled back from the early week gains.

Feeder cattle futures are holding losses of 40 cents to $1.20 per cwt as trade activity remains sluggish, but any sense of widespread support has evaporated at this point.

LEAN HOGS:

Narrow trade ranges have continued to develop in lean hog futures following the initial morning market shift. This has left prices generally unsupported, and traders are looking for increased market direction through the morning with prices hovering on either side of unchanged. The sharp pressure in pork values and weakness in cash trade may add pressure to the complex over the near future.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.54 at $57.58 per cwt with the range from $50.00 to $59.20 on 4,418 head reported sold.

Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.01 at $56.65 per cwt with the range from $50.00 to $58.00 on 1,848 head reported sold.

The National Pork Plant Report posted 307 loads selling with carcass values falling $4.59 per cwt. Lean hog index for 12/11 is at $64.97 down $0.20 with a projected two-day index of $64.86, down $0.11.

Weather

Markets

The Latest