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DTN Midday Livestock Comments          12/13 12:20

   Buying Seen in Feeder Cattle Futures   

   Strong feeder cattle gains have focused on the reduction of grain markets 
Thursday morning. This is allowing for increased overall support across the 
entire cattle market. 

By Rick Kment
DTN Analyst

General Comments

   Light activity has developed in cattle trade as feeder cattle markets 
sparking follow-through support based on pressure in grain markets. Lean hog 
futures are unsupported through most of the day with traders uncertain how the 
latest outside market pressure will affect the hog complex long term. Corn 
markets are steady in light trade. March corn futures are unchanged. Stock 
markets are lower in light trade. Dow Jones is 15 points lower with Nasdaq down 
46 points. 

   LIVE CATTLE:

   Mixed trade in live cattle futures has once again limited overall direction 
across the entire complex. There continues to be some increased overall support 
in deferred contract months based on the strong buyer activity in feeder 
cattle. But nearby trade remains mixed in a narrow trading range as overall 
limited direction is seen through the entire cattle market. Cash cattle bids 
have started to become more active with interest seen at $115 live basis in the 
South, while dressed bids are seen from $185 to $187 per cwt. It is still 
expected that most trade will be pushed off until Friday considering the 
current gap between bids and asking prices. Asking prices remain at $121 to 
$122 live and $190 and higher dressed. Boxed Beef cut-outs at midday are mixed, 
$0.62 lower (select) and up $0.47 per cwt (choice) with moderate movement of 67 
total loads reported (40 loads of choice cuts, 13 loads of select cuts, 7 loads 
of trimmings, 7 loads of ground beef).

   FEEDER CATTLE:

   Buyer interest in the feeder cattle futures have been exclusively focused on 
the overall pressure in soybean markets and early softness in the corn trade. 
This will reduce overall production costs, allowing for traders to become more 
aggressive due to limited information available surrounding beef demand through 
the last couple of days. 

   LEAN HOGS:

   Strong underlying pressure has redeveloped across lean hog futures with 
February futures holding pressure at 90 cents per cwt through late morning. The 
overall pressure in the complex has been sparked by aggressive softness in 
soybean markets as traders seem to be disappointed by the latest rounds of 
sales to China following all of the anticipation over the last couple of weeks. 
This is creating concerns about how much support the pork industry will see 
from any China buying activity. Cash prices are higher on the National Direct 
morning cash hog report. The weighted average price is $0.32 higher at $46.74 
per cwt with the range from $43.00 to $47.21 on 5,215 head reported sold. Cash 
prices are unreported due to confidentiality on the Iowa/Minnesota Direct 
morning cash hog report. Pork carcass values added $0.32 per cwt at $73.76 per 
cwt on 136 loads. Lean hog index for 12/11 is $55.54, down 0.44, with a 
projected two-day index is $55.36, down 0.18. 

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


(CZ)

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