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DTN Midday Livestock Comments          12/17 11:52

   Live Cattle Futures Draw Support Midday                  

   Live cattle futures moved from limit down trade early in the session to 
nearly limit higher in deferred contracts at midday. The lack of seller 
pressure entering the market left the vacuum to be filled with aggressive buyer 
interest. Additional volatility is likely to be seen over the next few trading 
sessions. 

By Rick Kment
DTN Livestock Analyst



GENERAL COMMENTS: 

   Live cattle futures have seen the most significant shift through morning 
trade, moving from limit lower losses to aggressive gains in deferred 
contracts. The wide price swing through the complex is likely to create even 
more uncertainty and volatility through the near future. Lean hog futures have 
gained very little support as weakness in pork values continues to hamper any 
buyer interest Wednesday. Corn prices are higher in light trade. March corn 
futures are 2 cents per bushel lower. Stock markets are higher in light trade. 
The Dow Jones is 120 points higher while Nasdaq is up 32 points.

   LIVE CATTLE:

   A significant market turnaround developed Wednesday morning as additional 
trade interest developed in the live cattle market. Prices quickly moved from 
the limit down shift seen in the morning to mixed at midday. Aggressive buyer 
support has redeveloped in deferred contracts with the potential to push prices 
limit higher before the day ends. This could easily account for a $6 per cwt 
daily shift in prices and may spark additional wide trading ranges and 
volatility through the end of the week. Cash cattle trade continues to trickle 
in through midweek with light trade seen in Kansas at $157 per cwt. This is 
pressuring the overall market, and may create additional uncertainty in all 
areas through the end of the week. Asking prices are much less definite given 
the pressure in futures, but likely to be around $160 and higher in the South 
and $256 and higher in the North. Beef cut-outs at midday are mixed, $1.71 
lower (select) and up $0.41 per cwt (choice) with active movement of 123 total 
loads reported (38 loads of choice cuts, 32 loads of select cuts, 30 loads of 
trimmings, 23 loads of ground beef).

   FEEDER CATTLE:

   The wide shifts in the live cattle futures market has had very little to no 
impact in the feeder cattle market through the morning. All contracts remained 
locked in limit down trade as the lack of support may continue to pressure the 
long term trend lower in not only the feeder cattle futures but the entire 
complex. 

   LEAN HOGS:

   The midday turnaround in live cattle futures has limited price pressure, but 
there still remains uncertainty through the complex surrounding the lack of 
cash hog price support and weaker pork values. It is unlikely that any 
significant buyer interest will develop over the near future as traders remain 
focused on building supplies over the next several weeks and months. Cash 
prices are lower on the National Direct morning cash hog report. The weighted 
average price fell $1.80 per cwt to $77.77 per cwt with the range from $77.00 
to $79.00 per cwt on 3,509 head reported sold. Cash prices are lower on the 
Iowa Minnesota Direct morning cash hog report. The weighted average price fell 
$2.73 per cwt to $78.07 per cwt with the range from $77.25 to $79.00 per cwt on 
587 head reported sold. The National Pork Plant Report is reported 346 loads 
selling as prices falling $1.28 per cwt. Lean hog index for 12/12 is at $87.30 
down 0.75, with a projected two-day index of $86.60 down 0.70.

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


(SK)

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