DTN Midday Livestock Comments 09/09 11:40

DTN Midday Livestock Comments 09/09 11:40 Mixed Livestock Trade Limits Trader Optimism Firm gains through the cattle complex early Wednesday have quickly eroded, although there is very little focus on pushing markets significantly lower at this point. Narrowly mixed trade is holding through the entire cattle complex as traders comfortable with treading water following the aggressive Market rally Tuesday. By Rick Kment DTN Analyst GENERAL COMMENTS: Livestock trade is confined to a narrow trading range through most of the morning with lean hog and feeder cattle futures slipping mostly lower at midday. The inability to hold onto early gains is not only indicating additional position taking following Tuesday's gains, but also is creating concerns that resistance levels may be out of reach for the current market structure. Corn prices are higher in light trade. September corn futures are 1 cent per bushel higher. Stock markets are higher in light trade. The Dow Jones is 37 points higher while Nasdaq is up 20 points. LIVE CATTLE: Live cattle futures have bounced higher and lower in a narrow range through the entire morning, with no indication that additional strong buyer support may develop before the close of trade Wednesday. The inability for nearby live cattle futures to hold early gains into closing bell over the last few weeks is causing some traders to remain very cautious, given the narrow trading ranges at midday. Cash cattle markets remain quiet Wednesday late morning with bids undeveloped. At this point, packers are expected to wait out the market, potentially leaving it until Friday before aggressively stepping into the market Asking prices are seen, but with little to go on other than desire to move the market higher and a need for the cash market avalanche seen the last few weeks to stop. But prices are seen from $146 and higher in the South and $235 and higher across the North. Beef cut-outs at midday are higher, $0.71 higher (select) and up $0.33 per cwt (choice) with active movement of 108 total loads reported (65 loads of choice cuts, 24 loads of select cuts, zero loads of trimmings, 19 loads of ground beef). FEEDER CATTLE: The strong and swift buying support that pushed prices sharply higher Tuesday has quickly dwindled through feeder cattle futures early Wednesday. Although losses are currently held to narrow ranges, the lack of renewed support in the market is the main focus across the complex. In order to sustain recent market support, it is expected that follow through buying will be needed to push prices even higher, otherwise the feeder cattle market will likely fall back into the previous market trend of showing strong one day gains, with the following trade quickly backing away from previous highs. If triple-digit gains can develop through the end of the session, this could indicate a break out of the previous pattern, and potentially spark renewed longer-term interest. LEAN HOGS: Early gains seen through lean hog trade which developed Wednesday morning have slowly eroded as the day progresses. Nearby and deferred contracts are trading mostly lower with losses ranging from 10 to 30 cents per cwt. The lack of direction in the market quickly developed after cattle complex started to back away from previous gains. The concern that follow through pressure may be seen in the last half of the trading session is creating a very cautious tone in the market, keeping most buyers confined to the sidelines for now. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.36 per cwt to $66.28 per cwt with the range from $60.00 to $67.50 per cwt on 6,265 head reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price added $0.05 per cwt to $67.30 per cwt with the range from $60.00 to $67.50 per cwt on 3,175 head reported sold. The National Pork Plant Report reported 303 loads selling with prices gaining $1.15 per cwt. Lean hog index for 9/4 is at $74.76 down 0.78, with a projected two-day index of $73.92, down 0.84. Rick Kment can be reached at rick.kment@dtn.com (BAS) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.