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DTN Midday Livestock Comments          12/07 11:54

   Hog Futures Post Sharp Gains Midweek 

   Follow-through buying has quickly developed in lean hog futures. This pushed 
prices $2 per cwt higher in nearby contracts. Cattle markets are under light to 
moderate pressure although trade volume remains sluggish. 

By Rick Kment
DTN Livestock Analyst

GENERAL COMMENTS: 

   Strong follow-through gains have quickly flooded into the lean hog futures 
complex. This continues to drive buyers to push for triple digit gains with 
prices moving more than $2 per cwt higher. Moderate losses are seen in cattle 
futures, although trade remains light. Corn prices are lower light trade. 
December corn futures are 1 cent lower. Stock markets are higher in light 
trade. The Dow Jones is 92 points higher while Nasdaq is up 8 points.

   LIVE CATTLE:

   Early cattle futures remained mixed in a narrow trading range. The lack of 
support in the complex continues to be pulled back following the aggressive 
triple digit gains seen Tuesday. Even though losses have expanded through the 
morning, traders remain generally on the sidelines, likely limiting overall 
trade pressure through midweek. Contract spreading is also being done between 
cattle and hog markets given the aggressive market support in the hog complex 
over the last week. Cash cattle sales on the Fed Cattle Exchange Auction 
averaged $110.28 per cwt with 3,401 head selling. Price ranges were seen from 
$109 to $112 per cwt, which is as nearly $2 per cwt lower than last week's 
price levels. A few bids are seen in Texas through the morning with prices at 
$110 to $112 per cwt while the rest of the market remains silent. Asking prices 
remain at $115 to $116 in the South and $176 to $178 in the North. Beef 
cut-outs at midday are lower $0.93 lower (select) and down $0.98 per cwt 
(choice) with active movement of 111 total loads reported (57 loads of choice 
cuts, 26 loads of select cuts, 0 loads of trimmings, 27 loads of ground beef). 

   FEEDER CATTLE: 

   Moderate pressure is holding through the complex. This softness is creating 
concern that additional pressure may be seen through the entire cattle market, 
especially given the lack of support in cash cattle trade over the last couple 
of days. But so far, the moderate 30 to 50 cent losses seen in feeder cattle 
trade has been limited to short covering activity after triple digit gains seen 
Tuesday. 

   LEAN HOGS:

   Sharp gains have continued to develop through lean hog futures trade with 
December contracts holding a $1.72 per cwt rally at midday following the 
aggressive move higher in cash and pork cutout values while February and April 
contracts have posted gains over $2 per cwt. This market support continues to 
drive widespread interest from both commercial and investment traders willing 
to flood the market following the continued move off of the market bottom over 
the last couple of months. Cash prices are higher on the National Direct 
morning cash hog report. The weighted average price gained $1.09 at $50.61 per 
cwt with the range from $44.00 to $52.50 on 6,295 head reported sold. Cash 
prices are higher on the Iowa Minnesota Direct morning cash hog report. The 
weighted average price added $1.38 per cwt to $51.58 per cwt with the range 
from $44.00 to $52.50 on 3,040 head reported sold. The National Pork Plant 
Report reported 200 loads selling with prices gaining $1.09 per cwt. Lean hog 
index for 12/5 is at $51.03 up $0.47 with a projected two-day index of $51.95 
up $0.92. 

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


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