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DTN Midday Livestock Comments          10/17 12:01

   Limited Buying Interest Adds Pressure to Lean Hog Futures 

   Lean hog futures have eroded through the morning with traders quickly 
backing away from strong early gains, now posting 80 cent losses in spot month 
contracts. Nearby gains are holding in cattle futures. This is creating some 
stability through the market Tuesday.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Livestock futures remain mixed at midday as firm gains have steadily 
developed through the live cattle complex. This has limited trade volume 
through the morning. Early support in lean hog trade has pulled buyers back 
from the market as nearby futures are now holding moderate to firm losses. Corn 
prices are steady to lower in light trade. December corn futures are steady. 
Stock markets are mixed in light trade. The Dow Jones is 17 points higher while 
Nasdaq is down 3 point.

   LIVE CATTLE:

   Strong gains have developed in October live cattle futures with traders 
focusing on firm commercial interest stepping back into the nearby contracts. 
All nearby futures have broken away from the early mixed trade seen across the 
complex with prices able to draw additional momentum Tuesday on the expectation 
that additional fundamental support will continue to develop over the next 
couple of weeks. Cash cattle markets are undeveloped early Tuesday with bids 
and asking prices generally hard to pin down at this point. It is expected that 
asking prices will start out $113 to $114 live basis and around $178 per cwt. 
It will likely be Thursday or Friday before active trade develops in most 
areas. Beef cut-outs at midday are lower, $0.75 higher (select) and up $0.30 
per cwt (choice) with light movement of 68 total loads reported (30 loads of 
choice cuts, 13 loads of select cuts, 13 loads of trimmings, 12 loads of ground 
beef). 

   FEEDER CATTLE:

   Feeder cattle futures are trading in a directionless market range with very 
little activity seen across the complex. The overall lack of movement in the 
complex has created very little incentive for traders to move in either 
direction. Prices are hovering from 15 cents per cwt lower to 12 cents cwt 
higher as traders look for direction from both the live cattle market as well 
as outside markets Tuesday morning.        

   LEAN HOGS:

   Moderate pressure has quickly developed across the lean hog futures trade 
with traders focusing on nearby contracts 30 to 80 cents per cwt lower. This is 
a significant shift from the strong morning rally seen in the first hour of 
trade. The focus across the market continues to draw buyers back into the 
complex, which may help to stabilize prices in deferred contracts. Cash prices 
are higher on the National Direct morning cash hog report. The weighted average 
price higher $0.54 at $58.91 per cwt with the range from $53.00 to $61.50 on 
5,419 head reported sold. Cash prices higher on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price added $1.36 at $61.02 per 
cwt with the range from $58.00 to $61.02 on 2,253 head reported sold. The 
National Pork Plant Report reported 204 loads selling with prices falling $0.70 
per cwt. Lean hog index for 10/13 is at $60.24 up $0.73 with a projected 
two-day index of $61.00, up 0.76.

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


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