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DTN Midday Livestock Comments          02/23 11:58

   Light Trade Keeps Futures Weak Friday

   Light to moderate pressure redeveloped in cattle trade through most of the 
morning. This lack of buyer support and inability to cover short positions may 
add longer-term weakness to the complex. Hog markets have turned slightly lower 
as traders try to square positions following the aggressive market rally over 
the last few days. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Light to moderate pressure is seen in most livestock trade as cattle futures 
continue to erode due to concerns of additional pressure developing in the near 
future. Hog trade is focusing on end-of-week position squaring, as limited 
losses are seen Friday morning. Corn prices are steady to lower in light trade. 
March corn futures are 1/2 cent lower Friday. Stock markets are higher in light 
trade. The Dow Jones is 137 points higher while Nasdaq is up 59 points.

   LIVE CATTLE:

   Moderate to firm losses have quickly developed through the live cattle 
futures market. Traders are also focusing on the inability to bring additional 
volume to the market at the end of the week. Some late-day market shifts may 
continue to develop as traders focus on the upcoming cattle on feed report. 
This may add even more uncertainty to the complex and spark some early-week 
market shifts Monday morning. Cash cattle bids have developed at $128 live 
through the South and $202 dressed in the North through the morning. Although 
there may still be a few cattle needing to be sold, it appears that for the 
most part both sides seem comfortable with previous market activity. This could 
allow for markets to remain at current levels with activity next week focusing 
on end-of-month needs also. Boxed beef cut-outs at midday are mixed, $0.83 
higher (select) and down $0.32 per cwt (choice) with light movement of 39 total 
loads reported (15 loads of choice cuts, 7 loads of select cuts, no loads of 
trimmings, 17 loads of ground beef). 

   FEEDER CATTLE:

   Feeder cattle futures have traded moderately lower through most of the 
morning, although prices have tried to break out of the lower market moves. 
This could add even more softness to the complex over the near future, as 
traders continue to focus on increased activity through the next couple of 
days. March futures are unchanged in light midday trade as the potential for 
late-day support may move back into the market.      

   LEAN HOGS:

   Light pressure is slowly trickling into the lean hog complex Friday morning 
following a strong market rally over the last two sessions. This overall 
support seen in the market has quickly pulled prices well off of recent lows, 
but traders are now starting to focus on end-of-week positioning, which could 
lead to increased volatility. The strength in the market continues to hold, but 
could draw additional buyer activity back to the market over the next week. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price is down $0.73 at $62.83 per cwt with the range from 
$57.00 to $63.75 on 3,252 head reported sold. Cash prices are lower on the 
Iowa/Minnesota Direct morning cash hog report. The weighted average price is 
down $0.52 at $63.19 per cwt with the range from $62.00 to $63.75 on 492 head 
reported sold. The National Pork Plant Report posted 135 loads selling with 
carcass values adding $0.77 per cwt. Lean hog index for 2/21 is at $70.17, down 
0.61 with a projected two-day index of $69.78, down 0.39. 

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


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