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DTN Midday Livestock Comments          04/25 11:46

   Limit Hog Losses Add To Bearish Market Tone

   Traders in nearby lean hog futures quickly reacted to the disappointing 
export sales report with limit losses. Additional sharp pressure is holding in 
cattle trade, adding to widespread market concerns.

By Rick Kment
DTN Analyst

General Comments

   Sharp triple-digit losses are seen in all livestock trade Thursday morning. 
Limit losses quickly moved into hog trade following a bearish export sales 
report which posted no new sales to China. Strong follow through pressure in 
cattle trade continued to focus on market liquidation after Wednesday's push 
lower. Corn futures are mixed in light trade. July corn futures are 1/4 cent 
higher. Stock markets are mixed in light trade. Dow Jones is 116 points lower 
with Nasdaq up 22 points. 

   LIVE CATTLE:

   Active selling has continued through the morning across live cattle futures. 
Triple-digit losses are seen in all contracts, with June through December 
futures trading $2.20 to $2.30 per cwt lower. This latest round of pressure has 
continued to push through short term support with June contracts at $116.07 per 
cwt. The combination of pressure in cattle trade earlier in the week and limit 
losses in the hog complex has created widespread selling interest through the 
morning. It is expected that prices will continue to hover in the current range 
through the end of the session, with little to no additional buying stepping 
back into the complex. Light cash cattle trade is being reported in the North 
through late morning with prices at $205 dressed and $127 live. This is 
generally $3 per cwt lower than week ago levels and is starting to account for 
the sharp losses in futures trade. Business in the south may be done, as 
feeders may hold onto cattle into early May given the cash market reaction in 
the North Thursday morning. Boxed Beef cut-outs at midday are higher, $0.21 
higher (select) and up $0.63 per cwt (choice) with active movement of 117 total 
loads reported (81 loads of choice cuts, 18 loads of select cuts, 6 loads of 
trimmings, 12 loads of ground beef).

   FEEDER CATTLE:

   Sharp losses redeveloped early Thursday morning and have continued to shift 
lower through the morning. This has pushed contracts $2 to $2.50 per cwt lower 
with August through October futures holding losses near $2.50 per cwt at 
midday. Traders are not only focusing on follow-through pressure following 
aggressive losses Wednesday, but sharp pressure in hog trade and concerns of 
very little supportive market news is allowing for widespread liquidation. 
Current losses are likely to hold through the end of the session, allowing for 
potential additional end-of-week pressure to develop Friday.

   LEAN HOGS: 

   Sharp limit losses have quickly and aggressively flooded into the lean hog 
futures complex Thursday morning. The lack of additional pork sales to China in 
the export sales report has quickly caused aggressive market liquidation. June 
through December contracts are locked in $3 per cwt losses despite an attempt 
to back away from the limit losses early in the session. Traders seemed to 
expect continued consistent selling week after week, given the last two weeks 
posted total sales over 100,000 metric tons. Even with the sharp losses, nearby 
prices are still $14 to $18 per cwt above support levels set during early 
spring. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price fell $0.51 per cwt at $80.23 per cwt with the range 
from $73.00 to $82.50, on 3,631 head reported sold. Cash prices are unreported 
due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. 
Pork values surged higher in light morning trade following aggressive gains in 
Picnic and Belly cuts. Pork cutouts added $3.51 per cwt at $90.49 per cwt with 
142 loads traded. Lean hog index for 4/23 is $82.79 up 0.72, with a projected 
two-day index is $83.40 up 0.61.

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


(CZ)

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