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DTN Midday Livestock Comments          09/17 11:58

   Cattle Contracts Holding Strong Gains  

   Firm buyer support seen early in the session has continued to build through 
morning trade. This has pushed live cattle and feeder cattle futures to 
triple-digit gains in nearby contracts with traders focusing on retracting 
losses which developed earlier in the week. Lean hog futures are under pressure 
with strong near-term losses focusing on fundamental market pressure. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Strong market support quickly redeveloped through the live cattle and feeder 
cattle futures Wednesday morning despite little changes seen in beef market 
direction or cash cattle activity. Pressure is developing in lean hog futures 
with nearby contracts holding losses of $1 per cwt or greater. Corn futures are 
lower at midday. December corn futures are 2 cents per bushel lower. Stock 
markets are higher in light trade. The Dow Jones is 8 points higher while 
Nasdaq is up 2 points.

   LIVE CATTLE:

   Pressure early in the week seemed to clear out an bearish tone in the live 
cattle complex even though very little encouragement is being seen in beef 
values and ability to increase overall wholesale prices over the last couple of 
weeks. Traders have quickly jumped back into all nearby contracts with December 
and February futures holding above $160 per cwt. It is uncertain just how much 
additional longer-term support this rally will be able to establish over the 
next couple of trading sessions. Cash cattle activity is starting to slowly 
improve with a few scattered bids of $245 seen in Nebraska Wednesday morning. 
It is uncertain just how much attention these will get at this point as asking 
prices are still not fully defined in most areas. Asking prices that are seen 
remain around $164 in the South and $253 to $255 in the North. Beef cut-outs at 
midday are mixed, $0.25 per cwt higher (select) and down $1.53 per cwt (choice) 
with active movement of 143 total loads reported (61 loads of choice cuts, 42 
loads of select cuts, 14 loads of trimmings, 26 loads of ground beef).

   FEEDER CATTLE:

   Aggressive buyer support has quickly stepped back into the feeder cattle 
futures Wednesday morning. Traders are looking for additional direction from 
the entire cattle complex, but so far, October through January futures are 
comfortably holding gains above $2 per cwt. It is too early to determine if the 
most recent support is driven by short covering, or if these gains can hold and 
establish another run higher over the next few days. 

   LEAN HOGS:

   The inability for strong support in the cattle markets to break through the 
barriers in the lean hog complex is creating some uncertainty about overall 
long-term direction of the market and also questioning fundamental support over 
the short term in cash hog prices and pork prices. All nearby futures are 
holding $1 per cwt losses at midday, with markets remaining extremely stable at 
the current price range for the time being. This could limit end-of-day support 
from redeveloping in both nearby and deferred contract months. Cash prices are 
lower on the Iowa Minnesota Direct morning cash hog report. The weighted 
average price fell $0.86 per cwt to $103.76 per cwt with the range from $102.25 
to $105.00 per cwt on 2,197 head reported sold The National Pork Plant Report 
is reported 261 loads selling as prices falling $1.46 per cwt. Lean hog index 
for 9/15 is at $103.22 up 0.96, with a projected two-day index of $104.15 up 
0.93.

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


(SK)

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