Wednesday Midday Livestock Market Summary - Additional Pressure Develops Across Feeder Cattle Markets

GENERAL COMMENTS: 

The cattle trade has focused on the aggressive turn lower seen in feeder cattle futures. The triple-digit losses have created uncertainty in the market ahead of the holiday weekend. Corn prices are higher in light trade. March corn futures are 2 cents per bushel higher. Stock markets are mixed in light trade. The Dow Jones is 7 points higher while Nasdaq is down 6 points.

LIVE CATTLE:

Triple-digit losses have been seen through all live cattle futures with the exception of lightly traded December contracts. The weakness in the feeder cattle market is the main driver of aggressive market pressure, which has added concerns that further weakness may quickly develop through the end of the year. Cash cattle markets remain undeveloped midday Wednesday with some bids starting to redevelop midweek. This may not spark additional trade through the rest of the day, but the pressure in futures markets is likely to limit the ability for feedlot managers to hold recent asking prices. Bids are seen at $117 to $118 live basis and $188 to $190 dressed. Asking prices are seen at $122 and higher live and $193 to $195 per cwt dressed basis. Activity on the Fed Cattle exchange remained sluggish with a total of 466 head offered on the auction while 239 head were sold. Prices on the few loads that sold were seen at $120 per cwt, which is as much as $4 per cwt lower than last week's prices. Beef cut-outs at midday are mixed, $0.70 higher (select) and down $4.21 per cwt (choice) with moderate movement of 88 total loads reported (58 loads of choice cuts, 18 loads of select cuts, no loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:

Losses in feeder cattle trade continue to expand through the morning with nearby contracts holding losses of $3 per cwt and greater. This aggressive turn lower has not only affected feeder cattle markets, but also is limiting any renewed support across the live cattle market. There is likely to be some additional pressure seen in the last couple hours of trade, although the weaker tone of the market will likely keep most buyers under pressure.

LEAN HOGS:

Firm buyer support has moved into lean hog futures trade despite pressure through the rest of the complex. This attempt to bring some additional stability into the market may help to spark buyer interest through the rest of the trading session. Nearby contracts are holding gains of 40 to 80 cents per cwt, which may bring additional interest back to the complex later in the week. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.33 at $55.96 per cwt with the range from $51.50 to $57.20 on 7,150 head reported sold. Cash prices are higher weighted average price is up $0.11 at $55.41 per cwt with the range from $51.50 to $56.25 on 2,937 head reported sold. The National Pork Plant Report posted 181 loads selling with carcass values falling $0.77 per cwt. Lean hog index for 12/18 is at $62.71 down $0.47 with a projected two-day index of $62.38, down $0.33.