DTN Midday Livestock Comments

GENERAL COMMENTS:

Live cattle futures have posted strong triple digit gains through the morning Friday with April futures leading the complex higher with gains exceeding $1.50 per cwt. This rally is helping to spark additional buyer support in both feeder cattle and lean hog markets. Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are mixed in light trade. The Dow Jones is 62 points lower while Nasdaq is up 3 points.

LIVE CATTLE:

Sharp triple-digit gains are seen in live cattle futures with traders focusing on strong commercial buyer activity moving back into the market. February futures are holding a $1.37 per cwt rally at midday while April futures are leading the market higher with a $1.62 cent per cwt rally. The building support seen in the complex continues to focus on uncertain fundamental support, but active commercial activity based on the potential for follow through buyer interest next week. Cash cattle quickly developed through the morning with prices generally steady with last week price levels. The lion's share of trade is expected to be done for the week, with prices already established even on expected clean-up trade that may develop. Prices in the South are $119 to $120 per cwt with most late trade seen at $120 per cwt. Dressed trade in the North is seen at $190 per cwt. It is still uncertain just how many cattle traded through the morning Friday, but the ability to draw trade early in the session and not drag it out through the rest of the day is impressive. Beef cut-outs at midday are higher, $1.12 higher (select) and up $1.15 per cwt (choice) with moderate movement of 89 total loads reported (61 loads of choice cuts, 11 loads of select cuts, 2 loads of trimmings, 15 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have bounced higher midday following the strong support in live cattle futures as well as steady cash cattle trade which is helping to build some needed stability into the market following the price shifts seen through the week. Nearby contracts are holding gains of 30 to 70 cents per cwt as traders remain focused on the ability to draw increased market support back into the complex.

LEAN HOGS:

Firm buyer support is seen through nearby and most deferred lean hog futures following the firmness in pork values and spillover support seen across the live cattle market. Nearby trade is seen from 50 to 75 cents per cwt higher at midday, as traders continue to draw underlying support back into the market at the end of the week. Sharp losses seen Thursday are being retracted more based on additional trade volume rather than any shift in overall fundamental market direction. Deferred futures remain lightly traded and generally weak, but the focus on nearby gains is driving most trader activity. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.46 at $71.83 per cwt with the range from $68.00 to $74.25 on 4,272 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 128 loads selling with prices up $0.78 per cwt. Lean hog index for 2/14 is at $75.31 up $0.69 with a projected two-day index of $75.98 up $0.67.

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

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