DTN Midday Livestock Comments 08/19 11:57

DTN Midday Livestock Comments 08/19 11:57 Sharp Losses Flood Through Cattle Futures Aggressive triple-digit losses are seen in both live cattle and feeder cattle markets late Wednesday morning. This could create additional softness late in the session, leading to further widespread liquidation through the week. By Rick Kment DTN Analyst GENERAL COMMENTS: Sharp losses are seen through the entire livestock complex Wednesday morning with cattle trade setting the tone for the renewed market weakness. Nearby live cattle futures are trading $2 to $2.65 per cwt lower, with all contracts holding triple-digit losses midday. A combination between technical and fundamental pressure is keeping the market on the ropes Wednesday. Corn prices are higher in light trade. September corn futures are 3 cents per bushel higher. Stock markets are lower in light trade. The Dow Jones is 177 points lower while Nasdaq is down 48 points. LIVE CATTLE: Sharp pressure has flooded through the livestock complex as nearby live cattle futures are suffering from a combination of blows. Technical pressure is seen as October futures have broken through short-term resistance levels, as well as lower cash cattle trade is setting a weaker outlook for the potential for cash markets to rally back through late August. All nearby contracts are trading $2 per cwt lower, as traders try to adjust to the softness of the market, as August and October contracts at trading below $145 per cwt at midday. Cash cattle trade is starting to develop late morning Wednesday, with activity in the North at $232 to $234 per cwt. This would be $4 to $5 per cwt lower than week-ago levels, and may be enough movement to set the general tone of the market for the rest of the week. Activity in the South remains quiet, although bids are seen consistently at $146 per cwt through the morning. Asking prices are firming at $152 and higher in the South and $248 and higher in the North. Beef cut-outs at midday are higher, $1.17 Higher (select) and up $2.05 per cwt (choice) with light movement of 78 total loads reported (41 loads of choice cuts, 21 loads of select cuts, 4 loads of trimmings, 12 loads of ground beef). FEEDER CATTLE: Even though front-month August feeder cattle futures have been keeping things relatively together through the morning with losses limited to 90 cents per cwt, the overall pressure through the rest of the complex has moved trader's attention to long-term market activity. October through April contracts trading more than $3 per cwt lower and further late day trade is possible before traders are able to pack up and go home. This could hit limit losses before the end of the session, creating additional long term pressure in the market. Lack of cash market support as well as aggressive softness in nearby live cattle trade is weakening the overall tone of the entire complex. LEAN HOGS: Spillover pressure from outside markets is having the biggest impact on the overall lean hog complex. With cattle futures showing aggressive and near limit losses through the morning, lean hog traders have been hard pressed to step back into the market and buy with such dismal surroundings. The strong turn lower in both stock and energy markets are creating some additional uncertainty through nearby and deferred futures. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $2.31 per cwt to $73.46 per cwt with the range from $73.29 to $76.50 per cwt on 3,042 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 305 loads selling with prices falling $0.42 per cwt. Lean hog index for 8/17 is at $78.80 up 0.10, with a projected two-day index of $78.93, up 0.13. Rick Kment can be reached at [email protected] (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.