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DTN Midday Livestock Comments          08/18 11:54

   Cattle Futures Draw Buyer Support Midday Friday 

   Firm gains have developed in feeder cattle trade midday Friday. This has 
helped to draw additional support back into the live cattle complex focused on 
end-of-week short covering. Hog futures remain under firm pressure, based on 
light volume. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Cattle futures have quickly backed away from early market pressure with 
markets mixed to moderately higher at midday. The buyer support is based more 
on short covering activity at the end of the week rather than any longer term 
change of direction. Hog futures remain stuck in the lower trend due to 
extremely light volume. Corn prices are higher in light trade. September corn 
futures are 2 cents higher. Stock markets are higher in light trade. The Dow 
Jones is 23 points lower while Nasdaq is up 30 points.

   LIVE CATTLE:

   Mixed trade is seen in live cattle futures with prices stuck in a narrow 
trading range. Buyers have stepped back into the complex based on short 
covering activity in front of the weekend, and not based on a change in market 
direction. This could help to bring some needed market stability back to the 
complex, but for now, it appears that most traders are focusing on weaker 
fundamentals still driving the future movement of the complex. Cash cattle 
market activity remains quiet with a few live bids developing in Nebraska at 
$109 per cwt. The light to moderate trade seen Thursday is expected to be 
enough to cover packer's needs at this point. Sales for the week have settled 
at $110 in the South and generally $175 in the North. Beef cut-outs at midday 
are lower, $1.70 lower (select) and down $0.57 per cwt (choice) with active 
movement of 80 total loads reported (56 loads of choice cuts, 8 loads of select 
cuts, no loads of trimmings, 16 loads of ground beef). 

   FEEDER CATTLE:

   Moderate buyer support has moved into the feeder cattle futures late morning 
Friday following strong early pressure which continued the downward market 
trend across the complex. There is expected to be some additional follow 
through support based on the short-covering activity that is now developing. 
Even though the overall tone of the cattle market remains extremely weak, the 
push higher in feeder cattle market has posted gains of 10 to 80 cents per cwt. 
Most traders are squaring positions in front of the weekend, rather than 
focusing on any changing direction in the market. 

   LEAN HOGS:

   Narrow market movement has been seen through the entire morning in lean hog 
futures trade with front month October holding a $1.10 loss as traders remain 
focused on the lack of cash market support and bearish movement through the 
cattle market. Even though pork values bounced higher at midday, the inability 
to draw additional buyer support back into the market at the end of the week 
will likely create even more pressure through the complex. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price fell $2.25 at $73.15 per cwt with the range from $69.00 to $75.00 on 
3,197 head reported sold. Cash prices are unreported due to confidentiality on 
the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant 
Report reported 143 loads selling with prices adding $1.06 per cwt. Lean hog 
index for 8/16 is at $87.70 down $0.33 with a projected two-day index of 
$83.19, down $0.51.  

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


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