DTN Midday Livestock Comments

General Comments

Strong losses have held through lean hog trade with triple digit pressure seen early in the morning has limited additional buyer activity in most contract months. Feeder cattle futures are holding moderate to strong gains, although this is showing only limited support to the live cattle complex. Corn markets are higher in light trade. March corn futures are 1/4 cent higher. Stock markets are lower in active trade. Dow Jones is 205 points lower with Nasdaq down 2 points.

LIVE CATTLE:

Live cattle futures are mixed in a narrow trading range with very limited activity seen through the complex. Firm gains in feeder cattle have shown very limited direction with light to moderate pressure seen in nearby contracts. This is offset by firming gains seen in the deferred contracts, as pressure in outside markets is limiting trade interest early Monday. Cash cattle activity remains silent focusing on show list distribution and inventory taking. It is likely to be the last half of the week before trade develops, with packer interest likely delayed until Wednesday. Boxed Beef cut-outs at midday are higher, $0.30 higher (select) and up $0.83 per cwt (choice) with light movement of 55 total loads reported (28 loads of choice cuts, 10 loads of select cuts, 2 loads of trimmings, 15 loads of ground beef).

FEEDER CATTLE:

Renewed buyer support has moved back into the feeder cattle futures complex with firm gains holding through the entire morning. Nearby contracts are holding 50 to 80 cents per cwt with increased underlying support developing through the complex. It is expected that trade volume will remain sluggish through the rest of the session, although current gains are expected to hold.

LEAN HOGS:

Firm losses have continued to erode Monday, although losses have backed away from session lows. There continues to be some additional pressure developing in all markets. February futures are leading the complex lower with a 90 cent loss as traders remain focused on increased pressure in all nearby and most deferred trade. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.05 higher at $47.89 per cwt with the range from $45.00 to $48.56 on 4,124 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values fell $0.64 per cwt at $72.99 per cwt on 152 loads. Lean hog index for 12/06 is $56.96, down 0.23, with a projected two-day index is $56.12, up 0.16.

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

(CZ)

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