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DTN Midday Livestock Comments          12/19 11:59

   Feeder Cattle Futures Post Strong Gains                   

   Gains in the feeder cattle markets are taking advantage of the new trading 
ranges which started Thursday. This is allowing for gains between $3 and $4 per 
cwt to hold in several feeder cattle contracts Friday. 

By Rick Kment
DTN Livestock Analyst



GENERAL COMMENTS: 

   Feeder cattle futures have been the main attraction of the livestock 
complex. Contrary to the moves earlier in the week, prices have shot sharply 
higher with gains seen between $3 and $4 per cwt through much of the morning. 
This is due to the increased trading limit in the feeder cattle complex of 
$4.50 per cwt which was implemented Thursday. Corn prices are lower in light 
trade. March corn futures are 3 cents per bushel lower. Stock markets are mixed 
in light trade. The Dow Jones is 8 points lower while Nasdaq is up 9 points.

   LIVE CATTLE:

   Strong gains are holding through the live cattle futures market despite 
continued pressure in beef values. The aggressive rebound in the feeder cattle 
futures has most live cattle traders just trying to keep up through most of the 
morning. Gains are hovering around $1 per cwt near midday, with light to 
moderate additional support possible through the end of the session. Cash 
cattle trade is relatively quiet Friday although bids are seen steady to firm 
with Thursday's levels. It is expected that more trade is needed to develop in 
the North before the end of the week in order to secure enough holiday numbers 
for packers. Beef cut-outs at midday are lower, $0.19 lower (select) and down 
$3.12 per cwt (choice) with active movement of 123 total loads reported (53 
loads of choice cuts, 10 loads of select cuts, 29 loads of trimmings, 32 loads 
of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have remained sharply higher through the entire 
morning. All concerns about further market pressure seem to have been dashed, 
at least temporarily, as gains are seen from $2.50 to $3.50 per cwt higher. The 
move above the $3 per cwt price level is getting double takes as traders and 
market watchers have become so accustom to trade being locked at the $3 per cwt 
level for so long. 

   LEAN HOGS:

   Lean hog futures continue to hold light pressure through most of the morning 
as the support which has been strong in cattle markets seems to have overlooked 
the lean hog complex for the moment. Traders continue to focus on the lack of 
support in both cash hog prices and pork values leading up to the Christmas 
holidays. This could continue to allow nearby and deferred contracts to slowly 
erode through the end of the year. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $0.67 per cwt to 
$75.68 per cwt with the range from $71.50 to $76.00 per cwt on 1,964 head 
reported sold. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report is 
reported 163 loads selling as prices fell $0.95 per cwt. Lean hog index for 
12/16 is at $85.95 down 0.65, with a projected two-day index of $85.15 down 
0.80.

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


(SK)

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