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DTN Midday Livestock Comments          07/19 12:18

   Cattle Futures Surge Higher Midday Wednesday

   Strong buyer support flooded into cattle markets late Wednesday morning. 
This offset the sharp triple-digit losses that were seen early in the trading 
day as buyers were quickly moving back into the complex following the 
aggressive market pressure over the last couple of sessions. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Aggressive price gains have flooded through cattle markets midday Wednesday 
following light to moderate trade activity on the Fed Cattle Exchange Auction. 
The shift from aggressive triple-digit losses which developed early in the 
morning is quickly changing the tone of the entire cattle complex, and may 
spark renewed buyer activity later in the week. Corn prices are higher in light 
trade. September corn futures are 5 cents higher. Stock markets are higher in 
light trade. The Dow Jones is 28 points higher while Nasdaq is up 38 points.

   LIVE CATTLE:

   Sharp gains have quickly moved into live cattle futures late Wednesday 
morning. The lack of support in the complex and strong triple-digit pressure in 
feeder cattle markets left the complex weak through much of the morning. But 
renewed buyer interest has quickly redeveloped across the market, moving nearby 
live cattle futures $2 per cwt higher with additional gains possible in the 
last hour of trade. Cash cattle markets remain generally quiet through the 
morning in feedlot country with a few cattle reported sold at $188 on a dressed 
basis in Nebraska. This is generally $2 per cwt lower than last week, but not 
enough cattle to establish a good market test. Live bids are developing in all 
areas at $115 to $117 during the morning. Activity on the Fed Cattle Exchange 
Auction report today listed a total of 2,912 head, with 708 head actually sold, 
1,467 head listed as unsold, and 737 listed as PO. The weighted average price 
was $118.27 The state-by-state breakdown looks like this: KS 344 total head, 
with 344 head sold at $118.25; NE 2,101 total head, with zero head sold, 1,427 
unsold and 674 listed as PO ($117.00-$117.75); TX 282 total head, with 282 head 
sold at $118.25-$118.50; CO 82 total head, with 82 head sold at $118.00; IA 40 
total head, with zero head sold; other states (OK) 63 total head, with zero 
head sold, and 63 listed as PO ($117.00). The delivery date/weighted average 
break downs are as listed: 1-9 day delivery: 626 head sold $118.30; 1-17 day 
delivery 82 head sold, $118.00; 10-17 day delivery 195 head, no sales; 17-30 
day delivery 803 head, no sales. Beef cut-outs at midday are mixed, $0.15 lower 
(select) and up $0.09 per cwt (choice) with active movement of 103 total loads 
reported (49 loads of choice cuts, 26 loads of select cuts, 14 load of 
trimmings, 14 loads of ground beef). 

   Feeder Cattle:

   Firm gains have quickly developed across all cattle futures Wednesday 
morning as feeder cattle futures quickly erased sharp losses and continue to 
hold gains at or near $1 per cwt higher near midday. This turn around in the 
market accounts to a $3 per cwt price swings through the morning in nearby 
contract prices. Overall lack of trade volume in the complex is one reason for 
the market shift, but renewed underlying support stepping back into live cattle 
trade with expectations that stability may be seen in cash cattle trade is 
helping to instill additional market momentum.    

   LEAN HOGS:

   Firm gains have moved into lean hog futures following the renewed support 
seen in cattle futures during late morning. The spill over support in the lean 
hog futures is still are result of extremely light trade activity across all 
contract months. August futures are leading the market higher with midday gains 
of $1 per cwt helping to spark renewed underlying support through the complex. 
But this support remains lackluster when it comes to long term deferred 
contracts as trade remains mixed in a narrow trading range. Cash prices are 
lower on the National Direct morning cash hog report. The weighted average 
price fell $1.29 at $84.27 per cwt with the range from $83.50 to $85.50 on 
3,894 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price fell $1.48 at $84.42 per 
cwt with the range from $83.50 to $85.50 on 685 head reported sold. The 
National Pork Plant Report reported 275 loads selling with prices adding $1.26 
per cwt. Lean hog index for 7/17 is at $92.46 down $0.04 with a projected 
two-day index of $92.40, down $0.06. 

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


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