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DTN Midday Livestock Comments          02/15 12:00

   Sharp Losses Sweep Through Feeder Cattle

   Limited buying is slowly stepping into live cattle and feeder cattle trade 
midday Thursday. This is creating additional market support through the entire 
complex.

By Rick Kment
DTN Analyst

General Comments

   Strong market pressure has quickly flooded into feeder cattle markets, which 
is affecting the movement and direction of live cattle trade. Hog futures are 
firming based on short covering at the end of the week. Corn markets are lower 
in light trade. March corn futures are 1 3/4 cents lower. Stock markets are 
higher in light trade. Dow Jones is 347 points higher with Nasdaq up 26 points. 

   LIVE CATTLE:

   Firm pressure developed Friday morning through the complex with traders 
looking for increased underlying pressure in feeder cattle trade. The strength 
in beef values at the end of the week is being overlooked by traders attention 
to triple-digit losses in these feeder cattle futures. Limited direction is 
expected through the rest of the complex with traders looking for additional 
outside market shifts. Cash cattle trade still remains quiet although bids are 
becoming more evident through the morning. Bids are holding at $122 live in the 
North and South, while dressed bids are developing at $198 to $199 per cwt. 
This is still a long ways from asking prices, and unlikely to gain interested 
sellers at this point. Asking prices remain at $126 to $127 live and $202 to 
$204 dressed. It may be late afternoon before deals are made. Cattle are priced 
at $126 to $127 per cwt, while dressed prices are listed at $203 to $205 per 
cwt. Boxed Beef cut-outs at midday are higher, $1.09 higher (select) and up 
$0.87 per cwt (choice) with light movement of 58 total loads reported (35 loads 
of choice cuts, 5 loads of select cuts, 4 loads of trimmings, 14 loads of 
ground beef).

   FEEDER CATTLE:

   Triple-digit losses have quickly expanded Friday morning as traders focus on 
uncertainty in the grain markets and the growing expectations that a deal will 
develop with China. Any grain market deal with China will be bearish for feeder 
cattle on a short-term basis at least, as this will likely increase production 
costs in the entire cattle complex. Even though nearby futures have backed away 
from session lows, the potential to break below February lows is adding 
weakness to the complex.

   LEAN HOGS: 

   End-of-week short covering has been the main agenda of traders which 
continue to focus on bearish fundamentals, but are covering positions at the 
end of the week. With trade closed Monday for Presidents day, the focus on 
maintaining recent support levels is sparking renewed buyer interest in nearby 
trade. Nearby futures are holding 30 to 60 cent gains, while narrowly mixed 
moves in deferred trade is keeping additional volume on the sidelines. Cash 
prices are unreported on the National Direct morning cash hog report. Cash 
prices unreported on the Iowa/Minnesota Direct morning cash hog report. Pork 
carcass values rallied higher on the morning report with prices adding $2.08 
per cwt at $64.84 per cwt with 177 loads traded. Lean hog index for 2/13 is 
$55.24, down $0.31, with a projected two-day index is delayed due to packer 
submission problems.

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


(CZ)

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