DTN Midday Livestock Comments

GENERAL COMMENTS:

Aggressive triple-digit gains have flooded into cattle markets following the recent widespread liquidation over the last couple of weeks. Nearby contracts are holding gains above $2 per cwt in both live cattle and feeder cattle trade. This is supporting follow-through buying. Corn prices are higher in light trade. March corn futures are 3 cents per bushel higher. Stock markets are higher in light trade. The Dow Jones is 138 points higher while Nasdaq is up 2 points.

LIVE CATTLE:

Strong buyer support has quickly and aggressively moved into live cattle trade Tuesday morning. This has pushed nearby contracts $1.50 to $2.50 per cwt higher at midday with underlying support building through all contracts. This is creating additional buyer support in February through June contracts as buyers who have been on the sidelines during the recent market pressure are very willing and able to step back into the complex. Follow-through support is expected to be seen through the end of the session, although prices may not move significantly higher before closing bell. Cash cattle activity remains undeveloped at this point with bids and asking prices hard to find through most of cattle country. Active trade is expected to be delayed until late in the week. The surge in futures prices may help to improve early week bids, but not likely to spark trade volume at this point. Beef cut-outs at midday are higher, $0.32 higher (select) and up $0.29 per cwt (choice) with light movement of 69 total loads reported (36 loads of choice cuts, 13 loads of select cuts, 7 loads of trimmings, 13 loads of ground beef).

FEEDER CATTLE:

Sharp triple-digit gains have quickly developed across all cattle trade as the aggressive pressure over the last couple of weeks has sparked some underlying buyer interest through nearby and deferred contracts. The focus continues to be placed on the recent moves in live cattle trade and is sparking delayed support in feeder cattle futures. Nearby contracts are holding gains of $2 to $2.50 per cwt as traders try to move markets higher and establish a sense of support through the week.

LEAN HOGS:

Lean hog futures have remained sluggish early Tuesday morning with front-month December futures able to hold onto moderate gains of 30 cents per cwt. The rest of the complex is focusing on follow-through market pressure as prices are holding consistent losses of 30 to 40 cents per cwt. The general lack of support in the market remains the focus through most of the trading session and will likely keep traders on a bearish focus through midweek. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.21 at $58.66 per cwt with the range from $52 to $59.20 on 5,866 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.62 at $58.04 per cwt with the range from $57.50 to $58.50 on 1,896 head reported sold. The National Pork Plant Report posted 244 loads selling with carcass values falling $0.12 per cwt. Lean hog index for 12/08 is at $65.17 down $0.31 with a projected two-day index of $64.97, down $0.20.

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

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