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DTN Midday Livestock Comments          09/23 12:08

   Cattle Futures Implode at Midday

   Live and feeder futures are sharply lower near the top of the noon hour, 
unexpectedly hammered by aggressive long liquidation and technical selling. For 
the most part, lean hog contacts are moderately lower, though nearby issues are 
holding up better than deferred. 

By John Harrington
DTN Analyst

GENERAL COMMENTS: 

   Shocked by the crashing board, cattle buyers and sellers seem almost 
paralyzed at midday, even though WTD trade volume totals are virtually zero. We 
have seen a few cautious bids are $106-107 in the South and $166-168 in the 
North. Late-week asking prices are equally tentative with a few cattle priced 
around $112-plus in the South and $172-plus in the North. We have seen a few 
scattered dressed deals in Nebraska marked at $168, roughly $2 lower than last 
week. The cash trade may not fully develop until late this afternoon, sometime 
after the close of futures and the release of the on feed report. According to 
the midday report, the national hog base is $1.33 lower compared with the Prior 
Day settlement ($47.00-51.00, weighted average $49.94). The corn market is 
several cents lower just before the noon hour, pressured by harvest activity 
and sharply lower bean prices. U.S. stocks are tracking lower, checked by 
sharply lower oil prices. Near midday the Dow is 65 points in the red with the 
Nasdaq off 13.  

   LIVE CATTLE: 

   Anyone who thought the cattle board would put in a quiet session before the 
development of cash news and the release of the on feed report were sadly 
mistaken. Prices have been collapsing this morning and remain 225 to 272 points 
lower at midday. Spot October are back challenging the bullish gap created on 
September 10. A weekly close below 104.40 would be very troubling. The 
late-week crash seems to be fueled by technical selling and nervousness about 
total meat supplies through the fourth quarter. Beef cut-outs are lower at 
midday, off 0.20 (choice, $187.17) to 0.31 (select, $179.31) with light to 
moderate box movement (40 loads of choice cuts, 22 loads of select cuts, 16 
loads of trimmings, 12 loads of coarse grinds).

   FEEDER CATTLE: 

   Feeders are plunging lower at midday along with their live counterparts. 
Prices are currently off 160 to 390. As feedlot profit potential looks more and 
more remote, feeder issues simply look more and more overpriced by commercials. 

   LEAN HOGS: 

   Lean hog issues are moderately lower in late morning business with prices 
off mostly 20 to 75 lower. We suspect that some late-week short covering/profit 
taking is working to minimize losses as of this writing. Spillover selling from 
the cattle complex could take more prisoners here as we move toward the close. 
The carcass value is under pressure at midday with all primals struggling 
except the ham and picnic. Pork cut-out: $77.27, off 0.80. CME cash lean index 
for 09/21: 60.48, off 0.48 (DTN Projected lean index for 09/22: 59.88, off 
0.60). 

   John A. Harrington


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