DTN Midday Livestock Comments 09/30 11:49
Cattle Futures Fall Below $100 Per Cwt
October Live cattle futures post limit losses Friday morning with losses
pushing prices below $100 per cwt. This lack of support impacted the entire
market. Lean hog futures have also added to long term losses by taking out
contract lows as December contracts have moved below $45 per cwt.
By Rick Kment
Stability seen midweek in livestock markets was unable to hold Friday
morning as traders flooded the market ready to liquidate positions at the end
of September. October live cattle futures are locked in limit losses of $3 per
cwt with prices under $99 per cwt as buyer interest was unwilling to step in
front of the massive steamroller and prices plummeted lower. Lean hog and
feeder cattle markets are holding contract lows in aggressive triple digit
losses late Friday morning. Corn prices are higher in light trade. December
corn futures are 5 cents lower per bushel. Stock markets are higher in light
trade. The Dow Jones is 181 points higher while Nasdaq is up 49 points.
Any hope of rebuilding support in the live cattle futures complex at the end
of September was quickly dashed early Friday morning as sharp losses flooded
into the complex. Triple digit losses are seen in all contracts with limit
losses holding front month October futures locked under $100 per cwt at $98.90
per cwt. A close at this level would be the first monthly close under $100 per
cwt in over six years, and an extremely bearish way to start out the fourth
quarter and month of October. December live cattle futures are closely
following the direction of October contracts, yet not at limit losses at
midday, but flirting with that level. This pressure continues to create
uncertainty through the entire complex, limiting commercial and investment
interest. Cash cattle trade is expected to be essentially done for the week,
although there are reports of a few bids seen in the south at $103 per cwt and
$160 in the North. But given the limit losses in live cattle futures at midday,
it is uncertain and relatively unlikely if these bids will still hold. Beef
cut-outs at midday are lower $0.01 lower (select) and down $1.83 per cwt
(choice) with light movement of 83 total loads reported (31 loads of choice
cuts, 12 loads of select cuts, 16 loads of trimmings, 23 loads of ground beef).
Sharp losses quickly moved into feeder cattle futures Friday morning,
although after initial pressure developed, trade volume slowed, and markets
remained under pressure in light trade. October feeder cattle futures are
holding $3 per cwt losses at midday at $124.50 per cwt while the rest of the
complex is trading from $3.25 to $4 per cwt lower as traders are focused on the
overall lack of support in the entire livestock market as well as the
widespread pressure and limit losses in live cattle contracts. A close at these
lows would be the lowest monthly low since 2010.
Lean hog futures have once again futures quickly fallen through any sense of
thin layer of support that may have been holding the market together over the
last couple of days. After initial buyer support was unable to hold at opening
bell, sellers quickly moved back into the market and moved through contract
lows like they were hot butter. This quickly left the door open for unsupported
markets and moved contracts wide open to fall aggressively lower as nearby
contracts are trading $2.50 to $2.70 per cwt lower at midday. October contracts
have fallen under $50 per cwt in the history of the contract while December
contracts have moved to below $45 per cwt at $44.40 per cwt. Long term support
in remains at $43 per cwt which still leaves markets room to fall before
traders have reason to step back into the market. Cash prices are lower on the
National Direct morning cash hog report. The weighted average price fell $1.08
per cwt to $47.87 per cwt with the range from $46.00 to $49.00 on 2,168 head
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash
hog report. The weighted average price fell $1.09 per cwt to $48.13 per cwt
with the range from $46.00 to $48.50 on 208 head reported sold. The National
Pork Plant Report reported 145 loads selling with prices adding $0.12 per cwt.
Lean hog index for 9/28 is at $57.35 down 0.28 with a projected two-day index
of $56.80 down 0.55.
Rick Kment can be reached at firstname.lastname@example.org
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