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DTN Midday Livestock Comments          01/30 11:24

   Cattle Futures Bounce Higher at Midday                   

   Midday buyer support has quickly developed. This has replaced light to 
moderate losses seen midmorning as traders continue to focus on end of the 
month position taking, as well as adjusting for pre-report expectations of the 
cattle inventory report. Hog futures remain mostly lower in light trade. 

By Rick Kment
DTN Livestock Analyst



GENERAL COMMENTS: 

   Buyer support is firming through the livestock complex at midday with nearby 
live cattle and feeder cattle contracts holding moderate to strong support as 
the focus shifts to end of the month positioning. There is some support 
expected to hold with the cattle inventory report expected to show a 1% drop in 
all cattle numbers from year ago levels. Corn prices are lower in light trade. 
March corn futures are 5 cents per bushel lower. Stock markets are lower in 
light trade. The Dow Jones is 94 points lower while Nasdaq is down 4 points.

   LIVE CATTLE:

   Trader direction has been hard to pin down through most of the morning with 
prices wandering higher and lower in a moderate range while overall trade 
volume appears to be moderate at best. There is likely to be some additional 
end of the week and end of the month positioning in both nearby and deferred 
contracts as traders look for increased support from outside markets as well as 
potential beef demand growth heading into the spring and early summer. Cash 
cattle activity remains quiet through the morning with just a few bids 
developing in Nebraska at $160 to $160.50 live basis and $252 per cwt dressed. 
It is expected that additional trade will need to develop before the end of the 
week, especially in the North. This could bring some late day activity which 
may be after futures markets close. Asking prices are holding around $161 and 
higher in the South and $258 and higher in the North. Beef cut-outs at midday 
are lower, $1.31 lower (select) and down $1.20 per cwt (choice) with light 
movement of 90 total loads reported (43 loads of choice cuts, 22 loads of 
select cuts, nine loads of trimmings, 16 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have bounced higher and lower through the morning 
following very light trade having a significant influence in price direction 
more than price shifts. But at midday, firm buyer support has redeveloped in 
nearby contracts raising nearby contracts to triple digit gains. The focus on 
end of the month positioning at the end of the session may help to draw 
additional support back into the market over the next hour of trade. 

   LEAN HOGS:

   Even though lean hog futures have broken away from the aggressive triple 
digit losses seen Thursday, the tone of the market remains weak with all but 
lightly traded May contracts holding light to moderate losses at midday. The 
futures market appears to be focused on eroding into the end of the week with 
additional focus on potential cash and meat value moves through early February. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price fell $0.79 per cwt to $66.11 per cwt with the range from 
$65.54 to $67.00 per cwt on 3,596 head reported sold. Cash prices are lower on 
the Iowa Minnesota Direct morning cash hog report. The weighted average price 
fell $1.11 per cwt to $66.45 per cwt with the range from $65.75 to $67.00 per 
cwt on 216 head reported sold. The National Pork Plant Report is reported 183 
loads selling as prices gaining $0.91 per cwt. Lean hog index for 1/28 is at 
$71.73 down 0.41, with a projected two-day index of $71.13 down 0.60.  

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


(SK)

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