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DTN Midday Livestock Comments          09/12 12:10

   Futures Bounce Off Morning Lows  

   Despite livestock futures still holding moderate losses at midday, light 
buyer support has pushed the contract well off of session lows as traders try 
to square positions before the weekend break. Weaker cash cattle trade is 
starting to develop, which could limit longer-term market support. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Follow-through pressure quickly developed in both the cattle and hog complex 
Friday morning with traders further eroding chart direction and creating a 
greater case for weaker market tones across the complex. But futures have 
bounced off session lows, helping to create end of the week position-squaring 
opportunities. Corn futures are lower at midday. December corn futures are 2 
cents per bushel lower. Stock markets are lower in light trade. The Dow Jones 
is 69 points lower while Nasdaq is down 21 points.

   LIVE CATTLE:

   Even though live cattle futures continue to trade lower at midday, the 
significant bounce above morning lows. The significant shift lower in the 
weekly chart across all live cattle contracts will be hard pressed in drawing 
additional buyer support into the market over the immediate future. Traders 
will need to be able to gain additional confidence that beef values still have 
upward market potential in order to step back into the complex. Cash cattle 
trade is starting to develop in the South at $161 per cwt. This is generally $1 
to $2 per cwt lower than last week as the active pressure in beef cutouts and 
futures markets has weakened the overall tone of the market. Bids are seen in 
the North at $249 to $250 per cwt, and may be where prices end up settling 
given the additional pullback in morning futures. Beef cutouts at midday are 
lower with $0.82 per cwt lower for select and down $1.01 per cwt for choice 
with moderate movement of 107 total loads reported (30 loads of choice cuts, 33 
loads of select cuts, 28 load of trimmings, 16 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have battled back from sharp triple-digit losses 
through morning trade, to hold narrowly mixed price levels at midday. Some of 
the support may be associated with end of the week profit taking, but overall, 
there seems to be little additional support to push prices aggressively lower 
due to expected demand support through the end of the year and tight supplies 
in both live cattle and feeder cattle numbers.   

   LEAN HOGS:

   Trade in the lean hog futures remains under pressure with nearly all 
contracts holding moderate losses. The ability to pull nearby contracts well 
off early market lows is not creating any buyer support but is focusing on 
traders squaring positions and taking profits in front of the weekend. Traders 
will need to find some additional direction early next week as cash and pork 
values seem to be moving in opposite directions at the end of the week. Cash 
prices are higher on the National Direct morning cash hog report. The weighted 
average price added $0.73 per cwt to $100.75 per cwt with the range from $90.00 
to $104.50 per cwt on 5,088 head reported sold. Cash prices are higher on the 
Iowa Minnesota Direct morning cash hog report. The weighted average price added 
$0.54 per cwt to $103.29 per cwt with the range from $90.00 to $104.50 per cwt 
on 3,050 head reported sold. The National Pork Plant Report is reported 158 
loads selling as prices falling $0.98 per cwt. Lean hog index for 9/10 is at 
$100.20 up 1.18, with a projected two-day index of $101.34 up 1.14. 

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


(SK)

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