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DTN Midday Livestock Comments          08/28 11:59

   Strong Gains Develop in Cattle Futures  

   Aggressive buyer support has quickly redeveloped through the live cattle 
futures market with October contracts surging over $2.50 per cwt through 
morning trade. This renewed interest has helped to spark strong gains in all 
cattle contracts. 

By Rick Kment
DTN Analyst


   Strong gains seen in nearby live cattle futures Thursday morning has 
redeveloped the expectation of follow through longer term buyer support 
remaining in the cattle market. October futures are the contract gaining the 
most attention, trading above $2.50 per cwt higher at midday. Hog futures 
remain mixed as position taking is going on through nearby contract months. 
Corn futures are higher at midday. September corn futures are 2 cents per 
bushel higher. Stock markets are lower in light trade. The Dow Jones is 27 
points lower while Nasdaq is down 4 points.


   Live cattle futures are gaining momentum through late morning trade with 
October futures leading the surge higher with gains above $2.50 per cwt. This 
turn around in the market is likely to draw more attention to cash cattle 
prices at the end of the week. There could also be some additional interest in 
by noncommercial traders stepping into deferred contract months through the end 
of the week. Cash cattle activity remains quiet with bids redeveloping Thursday 
morning in the same range as seen Wednesday. It is likely that packers want to 
try to get lists filled by the end of the day, but it is uncertain if they will 
be willing to become aggressive enough to do it. It appears that steady money 
will be needed to gain access to cattle, with the potential that feeders could 
be holding out for higher prices heading into the weekend. Bids are seen at 
$151 in the South and $240 to $241 in the North. Asking prices are holding at 
$155 in the South and $245 to $247 per cwt in the North. Beef cut-outs at 
midday are lower, 2.02 per cwt lower (select) and down $0.34 per cwt (choice) 
with moderate movement of 110 total loads reported (49 loads of choice cuts, 35 
loads of select cuts, 15 load of trimmings, 10 loads of ground beef).


   Feeder cattle trade has quickly moved from the lead market to show more 
comfort in tagging along as the live cattle futures market seems to be doing 
the heavy lifting through the morning. Moderate to strong gains are holding 
across both nearby and deferred contract months. But the focus on October live 
cattle reaching above $150 per cwt is the main incentive to get buyers to jump 
back into the game through morning trade. 

   Nearby lean hog futures continue to trade lower at midday. But the limited 
price range seen through the morning is creating some underlying support and 
could help to draw additional open interest into the market at the end of the 
week. Even if prices are not moving significantly Thursday, it appears that the 
overall lean hog market is focusing on rebuilding its strength, with the 
potential to sustain support levels at or around $90 per cwt over the short 
term. Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price fell 1.65 per cwt to $90.45 per cwt with the range from 
$89.00 to $90.57 per cwt on 3,592 head reported sold. Cash prices are 
unreported due to confidentiality the Iowa Minnesota Direct morning cash hog 
report. The National Pork Plant Report is reported 194 loads selling as prices 
down $0.21 per cwt. Lean hog index for 8/26 is at $100.34 down 1.57, with a 
projected two-day index of $98.86 down 1.48.

   Rick Kment can be reached at 


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