DTN Livestock Midday: Cattle Futures Weaken

Firm pressure in cattle trade is setting the tone as traders continue to trade the cattle on feed data through the day Monday. This is expected to leave cattle futures weak through the end of the session.

GENERAL COMMENTS:

Cattle futures are under firm pressure as follow-through losses are seen during the entire morning. This increased cattle placements and larger on feed number than what was expected is causing widespread weakness.

Corn markets are higher in light trade. September corn futures are 2 cents higher. Stock markets are lower in light trade. The Dow Jones is 176 points lower while Nasdaq is down 12 points.

LIVE CATTLE:

Strong pressure has been seen Monday morning through the live cattle complex. Very little long-term direction is seen through the morning, although traders seem to be still adjusting to Friday’s cattle on feed report. It is uncertain just how much of this market reaction will be confirmed as additional trade volume moves into the market over the next couple of days. It is expected that additional market volatility may develop over the coming days.

Cash cattle markets are silent Monday morning with show list distribution and inventory taking the main order of business. This may continue through the middle of the week, allowing for increased movement Thursday and Friday.

Boxed Beef cut-outs at midday are lower, $0.76 lower (select) and down $1.45 per cwt (choice) with light movement of 42 total loads reported (25 loads of choice cuts, 9 loads of select cuts, 0 loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Strong triple-digit pressure is moving into the feeder cattle futures market early Monday. The firm gains from year-ago levels seen on the cattle on feed report when it comes to feedlot placements have pulled any sense of market support away from the complex. The placements on the September 1st report, is the largest number of placements seen since these current numbers have been recorded.

The focus on lower grain prices is creating a push to put more cattle in feed yards earlier than what is typically seen. This may influence not only current levels, but shift percentages through the end of the year.

LEAN HOGS:

Lean hog futures are mixed in a narrow range with very limited activity seen through the entire complex. The limited movement in cash and futures trade is likely to leave prices hovering within a very narrow range through the rest of the session. Narrow losses in nearby contracts have been influenced by the pressure in the cattle complex. The focus on firming support in deferred trade is helping to spark some additional, but light buyer interest.

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

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

The National Pork Plant Report posted 122 loads selling on the morning report. Pork carcass values added $0.78 per cwt at $79.96 per cwt. Lean hog index for 9/20 is at $59.09 up 1.65 with a projected two-day index of 60.85, up 1.76.

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