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DTN Midday Livestock Comments          10/18 11:40

   Additional Losses Develop Thursday 

   Moderate to strong pressure is seen through the entire livestock complex. 
Lean hog trade remains focused on additional nearby liquidation, accounting for 
triple-digit losses at midday.

By Rick Kment
DTN Analyst

   Moderate to strong pressure has developed across the livestock complex 
Thursday morning. This is adding increased uneasiness through all trade with 
hog markets showing the most aggressive weakness. Corn markets are lower in 
light trade. December corn futures are 4 cents lower. Stock markets are lower 
in light trade. The Dow Jones is 277 points lower while Nasdaq is down 120 
points.

   LIVE CATTLE:

   Narrow trading ranges seen early in the session has allowed for 
follow-through pressure to develop. Most live cattle trade is holding losses 
from 65 cents to 85 cents per cwt as many traders remain concerned surrounding 
the moderate to sharp pressure that continues to develop in feeder cattle 
trade. December contracts are holding a 70-cent loss, but it also appears that 
traders remain cautious about adding additional active pressure to the market. 
Compared to all other livestock trade, cattle futures seem to have remained 
much more stable with traders still looking for strong overall demand support 
to help keep prices from aggressively eroding quickly over the near future. 
Cash cattle bids have quickly developed in all areas with live bids seen at 
$111 per cwt while dressed bids are at $174 per cwt. There are reports of light 
live cattle sales in the North at the $111 per cwt price level. This may set 
the tone for the week. Asking prices on cattle not sold are $113 to $114 per 
cwt live and $176 and higher dressed. Boxed beef cutouts at midday are higher, 
$1.25 higher (select) and up $2.20 per cwt (choice) with moderate movement of 
78 total loads reported (44 loads of choice cuts, 14 loads of select cuts, 14 
loads of trimmings, six loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures are mixed in a wide range. Front-month October futures 
continue to hold early support, pushing prices 77 cents per cwt higher. But 
spring 2019 contracts are showing increased weakness with prices falling as 
much as $1 per cwt through late morning. The lack of buyer support in most 2019 
contract months is likely to add even more uncertainty to the entire complex. 
This may spark some additional weakness through the complex, which has been 
focused on market liquidation through most of the week.  

   LEAN HOGS:

   Firm pressure is holding through the morning in lean hog futures with nearby 
contracts posting a $1.30 per cwt loss in December and February contracts. 
Trade volume remains limited through most of the complex, which may keep 
markets holding the current trading ranges through most of the session. There 
is expected to be some additional underlying weakness still developing through 
the end of the week based on concerns of fundamental pressure in the near 
future. Cash prices are unreported due to confidentiality on the Iowa/Minnesota 
Direct morning cash hog report. The National Pork Plant Report posted 187 loads 
selling on the morning report. Pork carcass values fell $0.16 per cwt at $78.36 
per cwt. Lean hog index for 10/16 is at $68.17 down $0.42 with a projected 
two-day index of $67.76, down $0.41.

   Rick Kment can be reached at rick.kment@dtn.com 


(SK)

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