DTN Midday Livestock Comments 09/27 11:39
Cattle Futures Test Limit Losses Tuesday Morning
Triple-digit losses quickly developed through the cattle complex as
liquidation flooded into the complex. October live cattle are locked in daily
trading limit losses of $3 per cwt at midday, while lean hog futures are mixed
in a narrow range.
By Rick Kment
Wide triple-digit losses have flooded into the cattle complex with limit
losses of $3 per cwt seen in front-month October live cattle futures. This has
quickly turned the entire cattle market lower and created concern through the
entire livestock complex. Lean hog futures remain mixed in light trade with
very little movement seen through the complex. Corn prices are higher in light
trade. December corn futures are 1 cents higher per bushel. Stock markets are
higher in light trade. The Dow Jones is 138 points higher while Nasdaq is up 41
October live cattle futures bounced off of daily limit lows of $103.82 late
morning Tuesday as sharp losses continue to hold across all nearby contracts.
The aggressive pressure continues to be seen in the market with traders pulling
back from week ago market highs. Even though prices are still nearly $4 per cwt
above contract lows set in early September, the aggressive tone seen during the
last two market sessions has quickly damaged the market structure and could
quickly change the price direction through the rest of the month. A close at
limit losses of $3 per cwt would expand limits Wednesday in live cattle
futures, potentially creating even more volatility in the already wild market
structure. Cash cattle markets are starting to start to develop with a few
starter bids trickling into the South at $104 while asking prices are seen at
$110 per cwt. Bids and asking prices are still quiet in the North with activity
potentially delayed in all areas delayed until the second half of the week.
Beef cut-outs at midday are higher $0.47 higher (select) and up $1.74 per cwt
(choice) with light movement of 66 total loads reported (26 loads of choice
cuts, 15 loads of select cuts, six loads of trimmings, 20 loads of ground
Lightly traded September feeder cattle futures remain 45 cents lower while
the rest of the complex is holding aggressive triple-digit losses following the
entire cattle complex lower as traders remain under pressure. October feeder
cattle futures seem to set the pace, essentially taking over as front-month
contract months holding losses of $3.50 to $4 per cwt through late morning with
prices trading near $127 to $127.50 per cwt. A close at these levels will have
broken though support levels set in early September, and likely lead to
additional liquidation through the rest of the month.
Trade in the hog complex has been locked in a mixed but narrow trading range
through the morning as the focus in the livestock market has been quickly
shifted to the panic selling taking place in the cattle complex that has
developed through the entire morning. October lean hog futures have held narrow
gains during the entire morning, while December and February futures have
shifted between narrow gains and losses during the morning between shifting
trade activity while traders seem to become locked within the narrow range
between contract lows and market resistance which is limited by weak
fundamentals. Cash prices are unreported due to confidentiality on the National
Direct morning cash hog report. Cash prices are unreported due to
confidentiality on the Iowa Minnesota Direct morning cash hog report. The
National Pork Plant Report reported 180 loads selling with prices falling $0.90
per cwt. Lean hog index for 9/22 is at $59.88 down $0.60 with a projected
two-day index of $58.93 down $0.95.
Rick Kment can be reached at firstname.lastname@example.org
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