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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
DTN Analyst

General Comments

   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. 

   LIVE CATTLE:

   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).

   FEEDER CATTLE:

   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. 

   LEAN HOGS:

   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 rick.kment@dtn.com 


(CZ)

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