DTN Midday Livestock Comments          10/23 11:57

   Cattle Trade Shifts Lower  

   Strong market losses have quickly and aggressively moved through the cattle 
complex Tuesday morning. This is limiting expected early-week support and 
causing some longer-term market concerns. Hog futures have added to Monday 
gains with firm market support developing.

By Rick Kment
DTN Analyst

   Strong losses have quickly developed in cattle trade through the morning 
Tuesday. Traders seem to be focusing on adjusting markets lower following 
early-week gains, and surrounding pressure in other commodity and financial 
markets. Hog trade has continued to gain support with traders still focusing on 
the oversold status in the complex over the last couple of weeks. Corn markets 
are higher in light trade. December corn futures are 3 cents higher. Stock 
markets are mixed in light trade. The Dow Jones is 305 points lower while 
Nasdaq is down 76 points.

   LIVE CATTLE:

   Live cattle futures remain lightly traded with outside market pressure 
having a greater impact on the direction of live cattle trade. Although October 
futures seem to finding some stability with losses limited to 12 cents per cwt, 
the rest of the complex is holding 50 to 80 cent losses as traders adjust to 
surrounding markets. Sharp triple-digit losses in feeder cattle has impacted 
the live cattle complex greatly, but so has the 300 point tumble in the Dow 
Jones Index. Little to no change has developed in market fundamentals with 
outside market factors driving trader intentions. Cash cattle activity remains 
sluggish with asking prices still hard to pin down. A few token bids have 
developed in Nebraska at $174 per cwt. It is likely that more bids will be seen 
midweek, although active trade may not be seen until the last half of the week. 
Boxed Beef cut-outs at midday are mixed, $0.71 lower (select) and up $1.27 per 
cwt (choice) with light movement of 68 total loads reported (29 loads of choice 
cuts, 17 loads of select cuts, 4 loads of trimmings, 17 loads of ground beef).

   FEEDER CATTLE:

   Strong triple-digit losses have quickly developed in feeder cattle trade 
Tuesday morning with October contracts the only futures contract not posing 
triple-digit losses. The overall lack of activity in spot month October 
contracts has caused most traders to move onto November and January futures 
which are holding $1.30 and $1.25 per cwt losses respectively. This pullback 
from sharp gains seen Monday is creating some additional short term uncertainty 
into the market as traders try to establish a more defined trading range.  

   LEAN HOGS:

   Strong morning buyer support has continued to develop through the lean hog 
complex with commercial traders moving back into the market to expand the 
aggressive support seen early in the week. December lean hog futures are 
leading the complex higher with a midday rally at $1.50 per cwt higher the 
focus on price spreads between nearby and deferred contracts continue to focus 
on market support early in the week. Cash prices are higher on the National 
Direct morning cash hog report. The weighted average price is $0.05 higher at 
$57.99 per cwt with the range from $51.00 to $58.50 on 11,973 head reported 
sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog 
report. The weighted average price is $0.56 higher at $58.19 per cwt with the 
range from $51.00 to $58.50 on 7,839 head reported sold. Pork carcass values 
added $0.04 per cwt at $78.43 per cwt. Lean hog index for 10/19 is at $66.43 
down 0.79 with a projected two-day index of 65.95, down 0.48.

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


(SK)

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