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DTN Midday Livestock Comments          09/20 12:08

   Cattle Futures Surge Higher Midday Wednesday         

   Strong triple-digit gains have quickly flooded into the cattle market. This 
buying momentum has quickly moved through feeder cattle and live cattle 
contracts with nearby live cattle futures flirting with limit higher trade.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp gains have quickly developed in all cattle futures with nearby live 
cattle futures holding gains over $2 per cwt. Feeder cattle futures continue to 
be the driving force in the cattle market as aggressive buyer interest is 
moving into the market with little seller resistance. This has pushed nearby 
contracts above $155 per cwt with traders focused on potential follow-through 
support moving into the market. Corn prices are higher in light trade. December 
corn futures are 2 cents higher. Stock markets are mixed in light trade. The 
Dow Jones is 23 points higher while Nasdaq is down 3 points.

   LIVE CATTLE:

   Has quickly broken out of the narrow trading range seen over the last couple 
of days as aggressive buying in feeder cattle futures has sparked aggressive 
long-term support across nearby live cattle futures. October and December 
contracts are holding gains of $2 per cwt at midday as long term support 
continues to move into all nearby contracts. Deferred futures have posted 
limited gains, but the support has grown significantly from midmorning with 
current price gains of 70 to 90 cents per cwt. Cash bids are starting to 
develop in all areas Wednesday morning although the overall tone of the market 
remains sluggish given that current bids are not likely to gain much attention 
over the next couple of days. Bids are seen at $104 live basis and $165 
dressed. Asking prices remain firm at $108 to $109 live basis while dressed 
asking prices are seen from $170 to $172 per cwt given the support in futures 
trade. The Fed Cattle Exchange Auction report today listed a total of 1,450 
head, with 636 actually sold, 440 head listed as unsold, and 374 head listed as 
PO. The state by state breakdown looks like this: KS 608 total head, with 382 
head sold at $106.50-$106.75, 0 head unsold, 226 head listed as PO ($106.00); 
NE 300 total head, with 0 head sold, 300 head unsold, and 0 head listed as PO; 
TX 542 total head, with 254 head sold at $106.75, 140 head unsold, and 148 head 
listed as PO ($106.50); CO no cattle listed; IA no cattle listed; other states 
no cattle listed. The delivery date/weighted averages breakdown is as listed: 
1-9 day delivery: 1,150 head total, 636 head sold, with a weighted average 
price of $106.67; 1-17 day delivery 97 head total, no sales; 10-17 day delivery 
0 head total; 17-30 day delivery 203 head total, no sales. Beef cut-outs at 
midday are lower, $0.20 lower (select) and down $0.13 per cwt (choice) with 
active movement of 124 total loads reported (48 loads of choice cuts, 14 loads 
of select cuts, 29 loads of trimmings, 33 loads of ground beef). 

   FEEDER CATTLE:

   Sharp midday gains have flooded back into the feeder cattle futures complex 
with October and November contracts leading the market higher with gains of 
$2.50 to $3 per cwt higher. This has helped to break through additional short 
term resistance levels as active buyer support floods back into the market 
uninhibited by what is still considered to be strong supply levels over the 
next several months. There continues to be increased long-term buyer focus as 
nearby contracts have moved above $155 per cwt and attempts to find even more 
support through the end of September. 

   LEAN HOGS:

   Strong early losses have been replaced by mixed market direction late 
morning as initial selling pressure has quickly slowed in nearby contracts. 
Front month October continue to hold firm market pressure with prices $1 per 
cwt lower based on generally light trade in the spot month contract. But 
moderate buyer support has quickly moved into other nearby contracts with 
prices steady to 40 cents per cwt higher at midday. This could help to draw 
additional trade volume back into the market over the near future. Cash prices 
are lower on the National Direct morning cash hog report. The weighted average 
price fell $0.67 at $50.40 per cwt with the range from $46.00 to $52.00 on 
7,726 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price fell $0.35 at $50.75 per 
cwt with the range from $46.00 to $52.50 on 4,077 head reported sold. The 
National Pork Plant Report reported 287 loads selling with prices gaining $0.85 
per cwt. Lean hog index for 9/18 is at $61.88 down $0.94 with a projected 
two-day index of $60.92, down 0.96.

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


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