DTN Midday Livestock Comments 02/08 11:51

DTN Midday Livestock Comments          02/08 11:51

   Cattle Trade Under Pressure Following Weaker Beef Values

   Moderate pressure is developing across live cattle and feeder cattle markets 
as traders remain concerned given the recent pressure in beef values. Hog 
futures are higher in light trade with front month futures gaining most of the 
attention through the morning. 

By Rick Kment
DTN Analyst


   Livestock futures are mixed in light to moderate trade activity. Cattle 
futures have turned lower with concerns of moderate cash market pressure and 
the inability to draw support back into beef values on the morning cutout 
report. Hog futures remain higher at midday with front month futures leading 
traders higher. Corn prices are higher in light trade. March corn futures are 1 
cent higher. Stock markets are lower in light trade. The Dow Jones is 49 points 
lower while Nasdaq is down 1 point.


   Light to moderate trade volume is seen across live cattle futures through 
the morning Wednesday. This is leading to additional pressure in all contracts. 
April futures are currently leading the market lower with 80 cent losses. Front 
month February futures are holding losses of 2 to 15 cents per cwt through much 
of the morning as market stability is being attempted by many traders. The 
overall lack of support in initial internet cash market trade as well as 
softness in beef values is adding to the late morning market pressure. The Fed 
Cattle Exchange Auction report today listed a total of 6,220 head, with 3,616 
actually sold, and 2,604 head listed as unsold. The state-by-state breakdown 
looks like this: KS 533 head at $119.75-$120.25; NE 2,309 head at 
$115.00-$119.00; TX 575 head, at $120.25-$120.50; CO 95 head at $119.00; IA no 
test; other states (OK, MN) 104 head at $118.00-$119.75. The weighted average 
was $117.60, down from last week's weighted average of $118.82

   Feedlot cash market movement remains undeveloped Wednesday morning although 
a few follow through bids are redeveloping in the South at the same prices as 
seen Tuesday. The $116 per cwt bids are unlikely to get much interest at this 
point and bids are undeveloped in the North. Asking prices are holding at $121 
to $122 per cwt in the South and $194 to $195 in the North. Active trade is 
likely to be pushed off until sometime Thursday or Friday with a late Friday 
trade not unexpected. Beef cut-outs at midday are lower, $1.03 lower (select) 
and down $0.15 per cwt (choice) with active movement of 101 total loads 
reported (64 loads of choice cuts, 16 loads of select cuts, 4 loads of 
trimmings, 17 loads of ground beef). 


   Initial market stability has eroded through the morning as nearby contracts 
are holding losses of 40 to 60 cents per cwt. The overall pressure in live 
cattle futures which followed softness in beef values has created selling 
activity in all feeder cattle markets. There is likely to be some additional 
pressure seen through the end of the session, even though trade volume is 
likely to remain sluggish during the rest of the day. 


   Lean hog futures have posted sharp gains in spot month contracts with prices 
moving $1 per cwt higher at midday. All other contracts are posting steady to 
narrow gains at midday with very little activity developing through the 
complex. The firming cash market support continues to draw traders to the 
market, with February futures once again setting contract highs as traders 
focus on additional potential fundamental support over the near future. Cash 
prices are higher on the National Direct morning cash hog report. The weighted 
average price added $0.62 at $70.91 per cwt with the range from $66.00 to 
$71.50 on 2,422 head reported sold. Cash prices are higher on the Iowa 
Minnesota Direct morning cash hog report. The weighted average price added 
$0.92 at $68.23 per cwt with the range from $65.84 to $71.50 on 5,722 head 
reported sold. The National Pork Plant Report reported 174 loads selling with 
prices gaining $0.31 per cwt. Lean hog index for 2/6 is at $71.45 up $0.50 with 
a projected two-day index of $72.19 up $0.74. 

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


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