DTN Midday Livestock Comments

GENERAL COMMENTS:

Strong price shifts have quickly helped to push cattle futures sharply higher, testing daily trading limits with December live cattle futures contracts holding $2.80 per cwt gains at midday. This support comes with very little additional market information and light volume but very volatile market swings. Hog futures have held early highs, but are much more stable through the Monday session. Corn prices are higher in light trade. December corn futures are 2 cents higher in front-month December contracts. Stock markets are higher in light trade. The Dow Jones is 2 points higher while Nasdaq is up 12 points.

LIVE CATTLE:

Narrowly mixed early trade has given way to strong triple digit gains in front month December contracts which are testing daily trading limits of $3 per cwt. The light trade volume in the complex has allowed for the volatile market shifts to be seen through the market, which could leave markets swinging in a wide range through the rest of the session before the session is over also with very little concrete evidence either way. Cash cattle markets remain extremely quiet Monday morning which is not a shock by any means following the extremely light trade last week. The lack of activity seen last week may spark additional movement in show lists through the week, although given the short holiday week, it is still in question just how aggressive packers will remain early in the week. Bids and asking prices are still undefined, and may remain that way until sometime Tuesday, although both sides would like to get business done before the close of business Wednesday if at all possible. Beef cut-outs at midday are mixed, $0.23 lower (select) and up $0.18 per cwt (choice) with moderate movement of 96 total loads reported (42 loads of choice cuts, 22 loads of select cuts, 1 load of trimmings, 31 loads of ground beef).

FEEDER CATTLE:

Sharp triple-digit gains have flooded into the lightly traded feeder cattle futures following a strong surge in live cattle contracts at midday. No change has developed in either fundamentals or technical market direction through the morning, but the lack of seller interest in the light activity as allowed for buyer interest to be unchecked, moving front month January futures $2 per cwt higher. Market volatility may continue to be seen through most of the week due to trade volume remaining light, which could set up for additional market movement through early December.

LEAN HOGS:

Trade has bounced moderately higher in nearby contracts through the morning, although the lack of intensity compared to the cattle complex is somewhat surprising given the underlying support seen in the December lean hog futures market. Nearby contracts are trading 67 to 96 cents per cwt higher at midday with trade volume remaining light, as traders are firmly planted in the market, but unable to draw aggressive buyer support at this point. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.88 per cwt to $50.11 per cwt with the range from $49.00 to $52.00 per cwt on 4,446 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 200 loads selling with prices down $0.38 per cwt. Lean hog index for 11/19 is at $55.52 down 0.35, with a projected two-day index of $55.37, down 0.37.

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

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