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DTN Midday Livestock Comments          01/22 12:01

   Feeder Cattle Selling Continues

   Sharp losses have quickly developed across feeder cattle futures Tuesday 
morning. This pressure is causing all cattle markets to adjust lower through 
morning trade. Early support in hog trade has eroded through morning trade.

By Rick Kment
DTN Analyst

General Comments

   Livestock futures are mixed in limited early-week trade. Traders seem to 
have little concern with a shortened trading week as strong triple-digit losses 
in feeder cattle futures is eroding previous support seen late last week. Hog 
futures remain mixed in limited direction, although most contracts are holding 
narrow gains. Corn markets are lower in light trade. March corn futures are 2 
1/4 cents lower. Stock markets are lower in light trade. Dow Jones is 283 
points lower with Nasdaq down 103 points. 

   LIVE CATTLE:

   Sluggish activity has developed through most of the morning as traders try 
to slowly get back into the routine following the three day weekend. Firm 
pressure is starting to develop in lightly traded spot month contracts, while 
moderate softness has developed through the rest of the market in connection 
with strong triple-digit losses across feeder cattle trade. Traders remain 
concerned about long-term summer and fall beef demand, which is starting to be 
seen in futures trade as well as feeder cattle market activity. Cash markets 
remain quiet with bids and asking prices still hard to find. It is expected 
that bids will not be active until midweek or later, with trade pushed off 
until later in the week once again. Boxed Beef cut-outs at midday are higher, 
$0.15 higher (select) and up $0.59 per cwt (choice) with light movement of 45 
total loads reported (22 loads of choice cuts, 17 loads of select cuts, no 
loads of trimmings, 5 loads of ground beef).

   FEEDER CATTLE:

   Sharp losses have quickly moved into feeder cattle trade Tuesday morning as 
any stability seen late last week seems to have been thrown out the window as 
traders focus on longer-term concerns of higher production costs and questions 
of beef demand growth. Even though live cattle futures are holding well in 
nearby trade over the past couple of weeks, the discount seen in late summer 
and early fall contracts is adding even more concern to feeder cattle prices.

   LEAN HOGS: Despite a firm early start Tuesday morning in lean hog futures 
prices, traders have slowly backed away from session highs with very limited 
direction developing across the entire lean hog market. April and May contracts 
still remain under light to moderate pressure with April futures holding a 60 
cent loss. The rest of the complex is maintaining firm buyer support with 
traders looking for increased trade volume through the rest of the complex. The 
overall sluggish market direction and pressure in cattle trade is likely to 
limit any buyer activity through the rest of the session. But traders seem 
focused on slowly bringing support back to the complex following recent losses. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price is down $0.15 at $52.20 per cwt with the range from 
$50.00 to $53.00 on 4,736 head reported sold. Cash prices unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork 
carcass values are higher on the morning report with prices adding $0.74 per 
cwt at $71.57 per cwt with 180 loads traded. Lean hog index for 1/18 is $58.07, 
down 0.09, with a projected two-day index is unavailable at this time. 

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


(CZ)

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