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DTN Midday Livestock Comments          09/29 13:10

   Strong Rally Developing in Cattle Complex         

   Following lackluster early trade in the cattle market, aggressive gains are 
seen in both nearby live cattle and feeder cattle futures. Lean hog futures are 
mixed, but have moved well off initial triple-digit losses seen after opening 
bell.

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Strong gains have developed in cattle futures at midday with both live 
cattle and feeder cattle futures holding triple-digit gains. The firm support 
of boxed beef values and higher cash cattle trade in the North last week may be 
sparking additional commercial and investment interest back into the market at 
the end of the month. Lean hog futures are mixed in a narrow to moderate range, 
but have moved well off of sharp losses seen during initial trade. Corn futures 
are higher at midday. December corn futures are 2 cents per bushel higher. 
Stock markets are lower in light trade. The Dow Jones is 96 points lower while 
Nasdaq is down 19 points.

   LIVE CATTLE:

   Strong triple-digit gains have quickly developed through the nearby live 
cattle complex with traders focusing on renewed price support in boxed beef 
values on the morning report. Traders are looking for additional interest later 
in the session to continue to develop as firm buyer support seems to be just 
under the surface following the limit-higher moves seen last Friday. Cash 
cattle markets go back to the normal Monday routine of show list distribution 
and inventory taking. Bids and asking prices may not be well defined until near 
midweek, although packers are expected to be running on tight supplies. Beef 
cut-outs at midday are higher, $1.90 per cwt higher (select) and up $0.71 per 
cwt (choice) with active movement of 123 total loads reported (55 loads of 
choice cuts, 42 loads of select cuts, 12 load of trimmings, 12 loads of ground 
beef).

   FEEDER CATTLE:

   Early pressure in the entire cattle complex has been replaced by moderate to 
strong gains in feeder cattle futures as traders focus on the expectation that 
additional buyer support will trickle into live cattle futures. Strong beef 
value support early in the week as well as the expectation that additional cash 
market support will follow due to packers expecting to need to gain access to 
additional product over the near future.   

   LEAN HOGS:

   Strong early pressure quickly developed Monday morning across all nearby and 
deferred lean hog futures contracts. But this initial pressure was short lived 
as sell orders quickly subsided and prices bounced well off of session lows. 
Narrowly mixed trade is seen at midday with the focus now not as much on 
Friday's report and expected larger supplies, but potential short term shifts 
in pork values and cash hog trade. There is also expected to be some additional 
end of month and end of quarter positioning done over the next couple of 
trading sessions. This could allow markets to focus on additional market 
support over the next couple of days. Cash prices are lower on the National 
Direct morning cash hog report. The weighted average price fell $4.84 per cwt 
to $101.82 per cwt with the range from $96.00 to $107.00 per cwt on 3,225 head 
reported sold. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report is 
reported 146 loads selling as prices gaining $1.26 per cwt. Lean hog index for 
9/24 is at $107.08 up 0.54, with a projected two-day index of $107.64 up 0.56.

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


(SK)

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