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DTN Midday Livestock Comments          10/23 12:01

   Live Cattle Futures Hold Narrow Trade Range

   Sharp early losses in feeder cattle futures have quickly retracted following 
buyers stepping back into the complex. Narrow price moves are seen in live 
cattle markets with mixed trade.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Firm pressure continues to be seen in nearby feeder cattle and lean hog 
futures midday Monday. Feeder cattle contracts have pulled back significantly 
from the sharp early losses that developed at opening bell as traders back away 
from the cattle on feed report results. Sluggish trade in live cattle markets 
has left markets mixed in a narrow range. Corn prices are higher in light 
trade. December corn futures are 6 cents per bushel lower. Stock markets are 
mixed in light trade. The Dow Jones is 15 points higher while Nasdaq is down 8 
point.

   LIVE CATTLE:

   Live cattle futures remain stuck in a narrowly mixed trading range midday 
Monday with the focus on increased market activity seen in feeder cattle 
futures following prices pulling back from the aggressive market losses. 
October and December live cattle futures are holding narrow gains of 2 to 12 
cents per cwt while other nearby contracts are comfortable holding narrow 
market losses in very sluggish morning trade. The overall lack of pressure in 
the complex comes while traders look for a sense of optimism from beef demand 
over the next several weeks which could stimulate additional market activity. 
Cash cattle markets are undeveloped Monday morning with show lists generally 
smaller across the country. This focused on offerings in southern states quite 
a bit smaller. It is likely that bids and offers may not be well established 
until later in the week with a general stalemate between packers and feeders 
that could last until the end of the week once again. Beef cut-outs at midday 
are mixed, $0.71 higher (select) and down $0.54 per cwt (choice) with light 
movement of 40 total loads reported (18 loads of choice cuts, 9 loads of select 
cuts, 7 loads of trimmings, 5 loads of ground beef). 

   FEEDER CATTLE:

   Sharp early losses following the bearish cattle on feed report Friday has 
quickly eased during morning trade as traders have taken a much more balanced 
approach to the complex. This is focusing on the expectation that even though 
traders have known about supply growth over the last several weeks and months, 
the expectation appears to be that demand will remain strong over the immediate 
and long term future. Firm pressure is still seen in November and January 
futures. But buyers have cut losses in have from earlier pressure as feeder 
cattle markets are trading 40 cents to $1 per cwt lower at midday.          

   LEAN HOGS:

   Light trade continues to be seen across the lean hog futures complex with 
nearby futures backing away from initial early gains as losses have developed 
in December through April contracts. This has posted losses of 5 to 72 cents 
per cwt as traders continue to focus on very light moderate activity through 
the entire morning while deferred futures are holding gains of 10 to 25 cents 
per cwt. The overall lack of support in nearby hog markets have little to do 
with long term market shifts and more to do with overall lack of activity early 
Monday morning. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price fell $0.01 at $64.45 per cwt with the range 
from $62.00 to $64.45 on 3,193 head reported sold. Cash prices are lower on the 
Iowa/Minnesota Direct morning cash hog report. The weighted average price fell 
$2.62 at $62.56 per cwt with the range from $62.00 to $64.00 on 257 head 
reported sold. The National Pork Plant Report reported 149 loads selling with 
prices falling $0.19 per cwt. Lean hog index for 10/16 is at $61.00 up $0.76 
with a projected two-day index of $62.21, up $1.21.

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


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