DTN Midday Livestock Comments
Feeder Futures Significantly Pressured Following New Evidence of Herd Expansion
Bids and asking prices in cattle feeding country remain poorly defined as traders monitor both the. board and Internet business. The Fed Cattle Exchange Auction report today listed a total of 5,131 head, with 1,729 actually sold, and 3,400 head listed as unsold in Nebraska. Generally speaking, prices ranged from $118 to $119.50. The weighted average was 118.82, down from last week's weighted average of 121.98. According to the midday report, the national hog base is 0.46 higher compared with the Prior Day settlement ($61.00-68.25, weighted average $66.08). Corn futures are 3-4 cents higher near the top of the noon hour, supported in part by positive ethanol demand. Wall Street is generally higher at midday with the Dow positive by 28 points and the Nasdaq up 28.
LIVE CATTLE:
Live contracts are moderately lower at midday, pressured by follow-through selling, technically damaged charts, and uncertain cash prospects. Although the FCE didn't represent a very big test this morning, sales $3 below last week may be working to make board discount look less outrageous. Beef cut-outs are significantly higher at midday, up 0.65 (choice, $193.52) to $1.36 (select, $190.29) with moderate box movement (65 loads of choice cuts, 14 loads of select cuts, 2 loads of trimmings, 10 loads of coarse grinds).
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FEEDER CATTLE:
Feeder issues are struggling with triple-digit losses as we move into the last hour of CME trading. Confirmation of building cattle numbers by yesterday's annual herd inventory is making it difficult to recruit new buying.
LEAN HOGS:
Supported by the advancing cash index, spot Feb is holding moderate gains at midday. Yet the rest of the complex is moderately lower, checked by profit taking and midweek long liquidation. Carcass value is moderately lower at midday, pressured by softer demand for. loins, picnics, and hams. Pork cut-out: $83.71, off 0.56. CME cash lean index for 01/30: 68.61, up 0.17 (DTN Projected lean index for 01/31: 69.07, up .46).
John A. Harrington can be reached at john.harrington@dtn.com
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