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DTN Midday Livestock Comments          02/21 11:53

   Pressure Develops in Cattle Trade Midweek 

   Sharp triple-digit losses have quickly moved through live cattle and feeder 
cattle futures. This move lower is not only quickly eroding price support but 
may significantly affect the ability for buyers to step into the market over 
the near future. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp losses have quickly flooded into the complex with triple digit 
pressure holding in both live cattle and feeder cattle trade. This overall lack 
of direction in the market may continue to add uncertainty to the entire 
market. Hog futures have backed away from early gains, but continue to hold 
moderate gains. Corn prices are steady to higher in light trade. March corn 
futures are 3/4 cent higher Wednesday. Stock markets are higher in light trade. 
The Dow Jones is 101 points higher while Nasdaq is up 56 points.

   LIVE CATTLE:

   Sharp losses have quickly developed across all cattle trade as the feeder 
cattle market continues to lead the live cattle futures lower. What started out 
as narrow to moderate losses has quickly developed into a triple-digit market 
tumble as nearby contracts are trading near $2.50 per cwt lower. This not only 
is affecting potential trade activity, but is likely to change the tone of the 
market, which has posted moderate to strong gains over the last week. Cash 
cattle trade still remains quiet with a few token bids developing at $127 per 
cwt in the South and $205 in the North. Asking prices are seen in the South at 
$132 per cwt although Northern cattle have not been priced at this point. The 
Fed Cattle Exchange Auction today listed a total of 218 head, with zero 
actually sold, 127 head listed as unsold, and 91 head listed as PO (Passed 
Offer). The state by state breakdown looks like this: KS 218 total head, with 
zero head sold, 127 head unsold, 91 head listed as PO ($126.25); NE - no cattle 
reported; TX - no cattle reported; CO - no cattle reported; IA - no cattle 
reported; other states - no cattle reported. The delivery date/weighted 
averages breakdown is as listed: 1-9 day delivery: 218 head total, 0 head sold; 
1-17 day delivery - no cattle reported; 10-17 day delivery - no cattle 
reported; 17-30 day delivery - no cattle reported. Boxed Beef cut-outs at 
midday are higher, $0.85 higher (select) and up $1.93 per cwt (choice) with 
light movement of 61 total loads reported (32 loads of choice cuts, 9 loads of 
select cuts, 5 loads of trimmings, 15 loads of ground beef). 

   FEEDER CATTLE:

   Sharp losses have quickly developed across the complex with traders focusing 
on increased market pressure in all cattle trade. This has moved nearby futures 
from $3 to $3.50 per cwt lower as the overall lack of direction in the market 
continues to limit market support. There is also a growing sense of market 
liquidation seen in the market following the inability to aggressively push 
prices higher at the end of last week and initial trade this week. Volatility 
in the market is expected to continue through much of the week.       

   LEAN HOGS:

   Light to moderate buyer support is stepping into the lean hog futures 
complex. This is adding to the market uncertainty following strong triple-digit 
gains seen early in the session. The support through the week is helping to 
draw additional trade to the market, but it is uncertain just how much long 
support this will build through the entire complex term. Cash prices are lower 
on the National Direct morning cash hog report. The weighted average price is 
down $0.23 at $64.06 per cwt with the range from $57.00 to $64.16 on 3,005 head 
reported sold. Cash prices are unreported due to confidentiality on the 
Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report 
posted 171 loads selling with carcass values falling $0.68 per cwt. Lean hog 
index for 2/19 is at $71.41, down 0.80 with a projected two-day index of 
$70.78, down 0.683. 

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


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