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DTN Midday Livestock Comments          05/24 12:04

   Pressure Develops in Cattle Trade Tuesday  

   Sharp pressure is seen in cattle markets as traders quickly move into the 
complex Wednesday, pushing markets into a triple digit market slide. This lack 
of support is likely to lead to additional uncertainty both technically and 
fundamentally in the near future. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp losses have developed in cattle futures Wednesday morning as weakness 
continues to quickly develop through the complex. Early losses have eased 
slightly in live cattle and feeder cattle markets, pulling markets off of 
session lows. This could allow for some breathing room later in the session 
despite the extremely light volume through the end of the session. Gains seen 
during the morning in lean hog trade have started to erode as pressure in the 
deferred contracts are starting to overshadow the lightly traded market. Corn 
prices are lower in light trade. July corn futures are 1/2 cent lower. Stock 
markets are higher in light trade. The Dow Jones is 32 points higher while 
Nasdaq is up 10 points.

   LIVE CATTLE:

   Pressure has developed through cattle markets with August through February 
futures trading $1 per cwt lower at midday. Losses continue to remain 
significant, but are well off of session lows, as traders have limited losses 
to nearly half of the earlier pressure seen through the morning. Trade volume 
is expected to remain sluggish through the rest of the afternoon. Cash cattle 
trade took place in the Fed Cattle Exchange Auction report today listed a total 
of 2,648 head, with 1,333 actually sold, and 1,351 head listed as unsold. The 
state by state breakdown looks like this: KS 508 total head, with 508 head sold 
at $131.00-$132.75; NE 950 total head, with 310 head sold at $133.00-; TX 544 
total head, with 401 head sold at $132.25-$132.50; CO 287 total head, all 
unsold; IA 281 total head, all unsold; other states 114 total head, with 114 
head sold at $132.50, all in Oklahoma. The weighted averages are as listed: 1-9 
day delivery: 1,086 head, $132.54; 1-17 day delivery 144 head, $132.50; 10-17 
day delivery 133 head, $132.50. Feedlot bids started to develop through end of 
the morning Wednesday at $130 to $132 in the South live basis with bids seen in 
the North at $208 per cwt. Asking prices are currently seen at $136 to $138 in 
the South and $215 in the North. Beef cut-outs at midday are mixed, $0.82 lower 
(select) and up $0.18 per cwt (choice) with light movement of 80 total loads 
reported (36 loads of choice cuts, 23 loads of select cuts, 4 loads of 
trimmings, 15 loads of ground beef). 

   FEEDER CATTLE: 

   Sharp losses have developed across the cattle market with triple digit 
losses seen in feeder cattle trade at midday. Even though prices have backed 
away from session losses near $4 per cwt, the significant pressure is putting 
some significant uncertainty on the enter market and could limit the overall 
outlook of cattle market support through the next several trading sessions. May 
futures are lightly traded and holding light 40 cent losses while the rest of 
the complex is under triple digit losses based on the underlying weakness 
through the rest of the complex. 

   LEAN HOGS:

   Firm buyer support has held in nearby contracts as traders moved into nearby 
contracts. But the inability to draw additional buyer support back into the 
market has severely limited overall market activity in all markets and created 
pressure in deferred futures. Weakness is seen in all but summer contracts as 
traders are lightly traded through the entire complex. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$0.44 at $70.77 per cwt with the range from $66.00 to $72.00 on 4,925 head 
reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash 
hog report. The weighted average price added $0.02 at $71.66 per cwt with the 
range from $66.00 to $72.00 on 2,010 head reported sold. The National Pork 
Plant Report reported 167 loads selling with prices adding 0.33 per cwt. Lean 
hog index for 5/22 is at $75.94 up $0.05 with a projected two-day index of 
$76.07 up $0.13. 

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


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