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DTN Midday Livestock Comments          01/23 11:18

   Cattle Futures Hold Limit Losses                 

   Aggressive pressure continues to hold across all livestock futures with live 
cattle and feeder cattle futures limit down in nearby contract months. Hog 
futures are holding strong losses, but light volume has kept prices off of 
limit price shifts. 

By Rick Kment
DTN Livestock Analyst



GENERAL COMMENTS: 

   Livestock futures are trading sharply lower at the end of the week. Nearby 
live cattle and feeder cattle futures are locked in limit down trade with the 
focus now on protection in front of the afternoon cattle on feed report. Corn 
prices are higher in light trade. March corn futures are 2 cents per bushel 
higher. Stock markets are mixed in light trade. The Dow Jones is 49 points 
lower while Nasdaq is up 10 points.

   LIVE CATTLE:

   Sharp limit-down losses continue to hold through the morning as February 
through June contracts are locked $3 per cwt lower. The focus on potentially 
higher cattle on feed has many traders taking extra protection. The focus on 
lackluster fundamentals continues to limit buyer support at the end of the 
week. Cash cattle trade continues to trickle into the market with a few cattle 
traded in Iowa through the morning at $255 per cwt. It is likely that most 
trade is done for the week, but there may continue to be some numbers trickling 
into the market, potentially after the cattle on feed report is released. 
Asking prices are at $162 and higher in the South and $260 and up in the North. 
Beef cut-outs at midday are mixed, $0.54 higher (select) and down $1.77 per cwt 
(choice) with light movement of 63 total loads reported (44 loads of choice 
cuts, eight loads of select cuts, four loads of trimmings, seven loads of 
ground beef).

   FEEDER CATTLE:

   Feeder cattle futures are locked in limit-down trade in March to August 
contracts based on uncertainty in front of the cattle on feed report coming out 
Friday afternoon as well as aggressive limit down losses in live cattle 
futures. Traders are unwilling to stop back into the market given the 
aggressive weak tone developing in the complex. This could leave prices 
unsupported through the end of the session. A limit down move in the March 
contract would open up the door to expanded limits Monday, which could add even 
more volatility as traders trade the result of the cattle on feed report. 

   LEAN HOGS:

   Strong pressure continues to hold through the entire livestock market, and 
this includes the lean hog futures market. Nearby and deferred lean hog futures 
are holding losses between $1.50 and $2 per cwt. The combination of sharp 
losses in the cattle complex and still weak pork values is creating a lack of 
interest of buyers stepping into the market from the sidelines. Cash prices are 
unreported on confidentiality on the Iowa Minnesota Direct morning cash hog 
report. The National Pork Plant Report is reported 160 loads selling as prices 
falling $2.48 per cwt. Lean hog index for 1/20 is at $74.55 down 0.30, with a 
projected two-day index of $74.11 down 0.44.  

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


(SK)

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