DTN Midday Livestock Comments 01/17 11:50

DTN Midday Livestock Comments 01/17 11:50 Price Pressure Develops Wednesday Widespread weakness across most commodity and financial markets Wednesday have led to softness in livestock futures during morning trade. Lean hog futures are attempting to stabilize at midday, although the market still remains generally weak. Rick Kment DTN Analyst GENERAL COMMENTS: Moderate to strong losses have developed in all livestock trade during morning activity Wednesday with outside market weakness seen as a significant factor in the lower moving cattle and hog futures. The overall lack of buyer support returning to the live cattle and feeder cattle futures is not creating any significant long-term market concern at this point, but traders are much more focused on the direction and volume of trade seen during the end of the week. The upcoming cattle on feed report which will be released Friday afternoon, will add another dimension to the cattle market as traders will try to adjust positions in front of the report over the next couple of days. Lean hog futures have bounced back from morning losses with narrowly mixed trade at midday. March corn is down 0 at $4.435 and March soybean meal is down $11.10 at $360.00. The Dow Jones Industrial Average is down 94.64 at 37,266.48. LIVE CATTLE: Live cattle futures are leading the livestock market lower Wednesday morning. The ability to command strong gains during the early week, Tuesday trade has allowed for some traders to start adjusting positions. Although there still may be many more price shifts and pre-report adjustments seen in live cattle futures before Friday's report, the expectation that cattle on feed numbers will be higher than year-ago levels is helping to curb some of the previous market optimism. Early triple-digit losses in live cattle futures have been replaced by more moderate pressure. This weakness may continue to be seen through the rest of the trading session, although traders are also focusing on the ability to sustain price support in beef values and cash cattle trade as the week continues. Cash cattle markets are still at a standstill Wednesday morning. This is not surprising given the shorter trading week and recent storms and bitterly cold weather seen over the past few days. Some asking prices from Tuesday at $174 to $175 in the South are still holding, but otherwise limited interest is being seen with bids unavailable in all areas, and Northern asking prices are still hard to pin down. February live cattle are $0.93 lower at $172.2, April live cattle are $0.65 lower at $174.525, June live cattle are $0.43 lower at $171.75. Boxed beef prices are higher: choice up $2.94 ($297.93) and select up $2.20 ($282.18) with a movement of 70.06 loads (35.59 loads of choice, 12.68 loads of select, 8.64 loads of trim and 13.15 loads of ground beef). FEEDER CATTLE: Feeder cattle futures have faded lower following the weakness seen in live cattle trade. The price pressure in grain trade which indicates lower overall production costs has had limited if any support to the feeder cattle market as traders are starting to not only factor in potential placement numbers in the upcoming Friday report, but also focus on the impact of price pressure in nearby live cattle trade. Following strong triple-digit gains in most contracts early in the week, this move has limited overall concern for the long-term direction of the market. But the ability to bring stability into the complex through the end of the week will be incredibly important in the overall direction of feeder cattle trade through the end of January. January feeders are $0.75 lower at $226.8, March feeders are $0.78 lower at $228.05 and April feeders are $0.58 lower at $233.70. LEAN HOGS: Lean hog futures followed the rest of the livestock market and most outside markets lower during early Wednesday trade. The spillover pressure following strong pressure Tuesday quickly limited buyer interest across all lean hog contracts. The inability to establish new market pressure has allowed for sell orders to fade as the morning has continued, allowing spot February futures to bounce higher at midday. Light support is also seen in late 2024 contract months which is helping to solidify overall buyer support in nearby and late market contracts. Even though there still remains significant concern about the ability to handle increased pork production levels over the next three to four months, the expectations that increased demand support is helping to limit losses seen over the last couple of trading days. February lean hogs are $0.15 higher at $70.925, April lean hogs are $0.03 lower at $77.55 and May lean hogs are $0.18 lower at $83.725. Hog Prices are higher on the Daily Direct Morning Hog report, up $0.19 with a weighted average of $45.84, ranging from $40.00 to $47.00 on 1,299 head with a five-day rolling average of $45.57. Pork Cutouts totaled 147.78 loads with 125.27 loads of pork cuts and 22.51 loads of trim. Pork cutout values are up $0.44 at $86.30. Rick Kment can be reached at kmentrick@gmail.com (c) Copyright 2024 DTN, LLC. All rights reserved.