Friday Midday Livestock Market Summary - Late-Week Pressure Impacts Trade

GENERAL COMMENTS:

The weakness in livestock markets Friday morning has very little to do with overall market direction, and more to do with price adjustments following the sharp rally, which developed Thursday and support building through the entire complex during the last week. Spot month feeder cattle and lean hog futures are holding the most aggressive pressure, although there is very little indication this will have an impact on either technical or fundamental support seen in the market over the last several trading sessions. Live cattle contracts remain mixed at midday as prices have slowly backed away from early market support. Although the expectation of higher cash values is helping to limit the overall weakness in the market. Strong gains are seen in most outside commodity and financial markets Friday morning allowing for traders to take additional positive market shifts into the weekend break. December corn is up 8 at $4.78 and December soybean meal is up $10.90 at $437.20. The Dow Jones Industrial Average is up 264.44 at 34,103.52.

LIVE CATTLE :

Limited moves have developed Friday morning in live cattle trade with spot December contracts unchanged at midday, while limited losses in other nearby contracts are offset by light gains in deferred contracts. The combination of limited trade volume and narrow price shifts is leaving live cattle markets generally directionless heading into the weekend. Mixed signals from cash and beef values is adding to the overall lack of market enthusiasm. Spot December contracts are still holding a weekly gain of $2.40 per cwt at midday, which is the first weekly positive close since early September. The ability to move off October lows and spark renewed buyer support back into the complex has the live cattle market back on a recovery course. Cash cattle trade is starting to trickle into the market with a few reports in Nebraska cattle selling at $184 live and $292 per cwt dressed. The $292 price level is $2 per cwt than last week's weighted average price, and may be enough of an incentive to spark additional trade within the current range. It will be interesting to see if feeders are willing to let cattle go at these prices, or just how much longer through the afternoon many will hold onto current asking prices. So far, cattle left on showlists remain firmly priced at $188 in the South and $294 across the North. Unlike last week when cattle trade drizzled in through the entire week, this week's trade could be over in a hurry during early Friday afternoon hours. December live cattle are unchanged, February live cattle are $0.50 lower at $185.925, April live cattle are $0.25 lower at $188.525.

Boxed beef prices are lower: choice down $1.86 ($302.67) and select down $1.80 ($272.54) with a movement of 110.00 loads (51.35 loads of choice, 15.44 loads of select, 34.13 loads of trim and 9.80 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures pulled back from the sharp gains seen Thursday as traders focused more on end of the week position squaring than any significant market direction. The lower price is the first indication of a market loss in spot November feeder cattle futures since last week, and even with the triple digit loss Friday, the feeder cattle market is still holding a gain of $4 per cwt for the week. The ability to distance price levels from recent market lows is the biggest focus of most traders and market observers as the aggressive two-month slide in feeder cattle prices is leaving markets ready for even more buyer support in the weeks to come. November feeders are $1.48 lower at $241.15, January feeders are $1.43 lower at $240.75 and March feeders are $0.80 lower at $243.625.

LEAN HOGS:

Lean hog futures have posted moderate price pressure Friday morning with traders slowly but steadily backing away from previous gains seen Thursday. The weakness in the market has more to do with lack of trade volume and limited direction than any technical of fundamental pressure seen across the complex. December lean hogs are $1.38 lower at $71.9, February lean hogs are $0.80 lower at $75.425 and April lean hogs are $0.93 lower at $80.575.

Hog Prices are lower on the Daily Direct Morning Hog report, down $2.88 with a weighted average of $66.94, ranging from $65 to $69 on 1,058 head with a five-day rolling average of $69.58. Pork Cutouts totaled 186.07 loads with 154.70 loads of pork cuts and 31.37 loads of trim. Pork cutout values are up $0.73 at $86.37.