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DTN Midday Livestock Comments          05/29 11:45

   Feeder Cattle Futures Continue Aggressive Gains                    

   Losses have quickly developed in both cattle and hog futures as traders back 
away from Thursday's gains in an attempt to cover positions ahead of both week 
and month end. Softness in beef values is expected to create some additional 
uncertainty about the ability to sustain and grow beef demand through the next 
few weeks. 

By Rick Kment
DTN Analyst


   Moderate to strong pressure is seen through the entire livestock market 
Friday morning as traders quickly position holding at the end of the month. The 
sharp turn lower in both cash hog values and beef values in morning reports 
puts some additional caution on the market Friday. Corn prices are lower in 
light trade. July corn futures are 1 cent per bushel lower. Stock markets are 
lower in light trade. The Dow Jones is 96 points lower while Nasdaq is down 14 


   Moderate to strong end of the week pressure is developed across the live 
cattle complex. Nearby contracts are holding losses of 50 to 90 cents per cwt 
at midday, although these market shifts are doing very little to technical 
market structure at this point. If markets close at or near current levels, 
little will have changed for the overall direction of the market on the weekly 
or monthly charts as prices still remain stuck in the wide trading range seen 
over the last several weeks. Cash cattle markets remain quiet, although bids 
have become more readily available through the morning. Bids are seen in the 
North at $160 live basis, and $248 to $252 dressed basis. It is likely that 
trade will be seen through early afternoon Friday as packers still need to 
access cattle for early June deliveries. Asking prices are seen at $163 and 
higher live basis in the South, and $258 to $260 dressed in the North. Beef 
cut-outs at midday are lower, $3.17 lower (select) and down $4.14 per cwt 
(choice) with moderate movement of 90 total loads reported (58 loads of choice 
cuts, 25 loads of select cuts, 9 loads of trimmings, 24 load of ground beef).


   Prices continue to erode through the morning with front month August 
contracts holding the most aggressive losses, currently $1 per cwt lower. Even 
with this moderate to strong pullback at the end of the week, nearby feeder 
cattle contracts are holding aggressive gains on both the weekly and monthly 
charts. This is causing traders to liquidate positions as they focus on profit 
taking opportunities on the last trading day of May. 


   Initial mixed trade has turned into moderate widespread pressure through the 
entire complex as traders look for additional fundamental support at the end of 
the week. The strong pressure in national cash hog prices on the morning report 
combined by losses in the cattle complex have quickly eroded any buyer interest 
midday. At this point it is uncertain if buyers will be willing to step back 
into the market before the end of the month, or if most will be willing to just 
let the market slide lower, and take over next Monday with the entire month of 
June ahead of them. Cash prices are lower on the National Direct morning cash 
hog report. The weighted average price fell $2.08 per cwt to $77.48 per cwt 
with the range from $68.00 to $80.50 per cwt on 5,107 head reported sold. Cash 
prices are have no comparison to prior day reports on the Iowa Minnesota Direct 
morning cash hog report. The weighted average price is $79.64 per cwt with the 
range from $73.75 to $80.50 per cwt on 390 head reported sold. The National 
Pork Plant Report reported 153 loads selling with prices adding $1.45 per cwt. 
Lean hog index for 5/26 is at $82.51 down 0.40, with a projected two-day index 
of $82.20 down 0.31. 

   Rick Kment can be reached at 


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