Wednesday Midday Livestock Market Update

GENERAL COMMENTS:

Early buyer support has exited the cattle market as buyers have moved away from the sharp triple-digit gains that drove prices to session highs. The narrow market support seen in the market continues to hold, but is unable to draw additional support. Lean hog futures are holding sharp triple-digit losses, as traders continue to focus on widespread liquidation. Corn prices are higher in light trade. May corn futures are 3 cents higher. Stock markets are lower in light trade. The Dow Jones is 77 points lower while Nasdaq is down 33 points.

LIVE CATTLE:

Live cattle markets are holding narrow gains midday Wednesday morning following what started out to be aggressive market moves. There is firm support that continues to potentially draw back into the market and could return later in the session, but for now it appears that prices may hold within a narrow trading patterns through the rest of the trading session. Cash markets posted sales on The Fed Cattle Exchange Auction Wednesday, which listed a total of 5,245 head, with 120 head actually sold, and 5,125 head listed as unsold. Asking prices ranged from 125.00-130.00. The state-by-state breakdown looks like this: KS 558 total head unsold (123 of those were PO at $126.75); NE 3,625 total head, 120 head sold at $126.00, 3,505 head unsold; TX 540 total head unsold (208 of those PO at $126.00); CO none reported; IA none reported; other states (OK, MO) 522 head unsold. The weighted average was $126.00, not comparable to last week due to no sales. Sales are undeveloped at this point in feedlot trade, although bids are starting to develop at $125 in the South and $196 to $200 in the North. Asking prices are seen at $128 to $$130 in the South and $205 and higher in the North. Beef cut-outs at midday are mixed, $0.47 lower (select) and up $0.41 per cwt (choice) with active movement of 100 total loads reported (100 loads of choice cuts, 36 loads of select cuts, 5 loads of trimmings, 19 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have quickly moved from the sharp triple-digit gains seen early in the session. Midday price moves are now holding mostly lower with April contracts at 25 cents per cwt lower. The overall pressure in the complex has moved front-month contracts below $137 per cwt from the contract high of near $139.50 per cwt early Wednesday morning. There is likely to be additional market shifts during the last hour of trade, although the underlying tone of the market has weakened as buyer support as now stepped away from the complex.

LEAN HOGS:

Sharp losses are seen across lean hog futures with triple-digit pressure developing in May through April 2018 contract months. The overall lack of softness in the entire complex is drawing additional liquidation into the market and bringing even more selling activity. This may allow prices to lean toward limit losses before closing bell. Cash prices are unreported due to technical problems at midday on the National Direct morning cash hog report. Cash prices are unreported due to technical problems on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 196 loads selling with prices slipping $0.72 per cwt. Lean hog index for 4/10 is at $64.65, down $0.47, with a projected two-day index of $64.16, down $0.49.