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DTN Midday Livestock Comments          01/17 11:41

   Cattle Futures Rally Midweek 

   Firm buyer support has moved into the cattle complex Wednesday morning as 
traders continue to step back into the market. The uncertainty as to just how 
much fundamental support is still limiting trade volume, but buyers remain 
aggressive midday. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   The aggressive buyer support which is developing in cattle markets is 
helping to draw increased activity to the market. There is growing support in 
front month live cattle and feeder cattle futures. Hog markets have eroded 
through the morning, although there is likely to be some additional weakness 
developing across the complex. Corn prices are higher in light trade. March 
corn futures are 4 cents higher Wednesday. Stock markets are higher in light 
trade. The Dow Jones is 160 points higher while Nasdaq is up 36 points.

   LIVE CATTLE:

   Buyer activity has quickly redeveloped in all live cattle futures with front 
month February contracts leading the market higher with gains of $2.80 per cwt 
at midday. The push to sharp near limit price surges through the morning has 
not only added increased support to the market, but it is helping to add volume 
to the entire cattle complex. All contracts are holding triple digit gains, 
with the focus on additional longer term support. Cash cattle activity is 
slowly starting to pick up with a few bids scattered in all areas. Bids are 
seen at $118 live and $189 to $190 dressed basis. Active trade may not develop 
until later in the week with a Thursday or Friday trade deadline not unlikely. 
The Fed Cattle Exchange Auction today listed a total of 304 head, with 108 
actually sold, 53 head listed as unsold, and 143 head listed as PO (Passed 
Offer). The state by state breakdown looks like this: KS 196 total head, with 0 
head sold, 53 head unsold, 143 head listed as PO ($118.00-$119.50); NE -- no 
cattle reported; TX 108 total head, with 108 head sold at $119.75, 0 head 
unsold, and 0 head listed as PO; CO -- no cattle reported; IA -- no cattle 
reported; other states -- no cattle reported. The delivery date/weighted 
averages breakdown is as listed: 1-9 day delivery: 304 head total, 108 head 
sold, with a weighted average price of $119.75; 1-17 day delivery -- no cattle 
reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no 
cattle reported. Boxed Beef cut-outs at midday are lower, $0.33 lower (select) 
and down $0.07 per cwt (choice) with light movement of 82 total loads reported 
(44 loads of choice cuts, 16 loads of select cuts, 10 loads of trimmings, 12 
loads of ground beef). 

   FEEDER CATTLE:

   Triple-digit gains have continued to develop across all cattle markets with 
feeder cattle futures holding gains from $1 to $2 per cwt midday. The overall 
lack of selling pressure in the market has continued to bring additional 
support to the market although the volume in the market may remain sluggish. 
Front month January futures are leading the market higher with a $2 per cwt 
gain, as traders are trying to keep up with gains in the live cattle futures.   

   LEAN HOGS:

   Light to moderate losses continue to be seen in lean hog futures trade, 
although prices have moved significantly from sharp early losses during the 
first hour of trade. Front-month futures continue to hold a $1 per cwt loss, 
although the rest of the market remains focused on potential market stability 
through the end of the week. The overall lack of direction in the market could 
cause prices to shift in a moderate range over the near future. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price is down $0.49 at $69.22 per cwt with the range from $62.00 to $71.00 on 
8,000 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price is down $0.92 at $68.86 per 
cwt with the range from $64.00 to $69.50 on 680 head reported sold. The 
National Pork Plant Report posted 157 loads selling with carcass values adding 
$0.08 per cwt. Lean hog index for 1/15 is at $71.92 up $0.77 with a projected 
two-day index of $72.99, up $1.07.

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


(BE)

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