DTN Midday Livestock Comments          01/22 11:42

   Cattle Futures Find Support Wednesday Morning 

   Strong, triple-digit gains have flooded into cattle futures Wednesday 
morning, as traders continue to focus on strong cash buyer interest as well as 
firm support in wholesale beef values. Hog futures are lightly traded with 
mixed price ranges Wednesday morning.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Renewed cash cattle buyer interest has slowly redeveloped Wednesday morning 
with Southern bids at $201 per cwt live basis. This is steady with the limited 
trade seen Tuesday and also steady with last week's price point. Strong, 
triple-digit gains have developed in both live cattle and feeder cattle futures 
with the March feeder cattle contract leading the charge higher as gains have 
exceeded $4 per cwt Wednesday morning. This is helping keep nearby live cattle 
futures at $199 per cwt, as traders test the $200 per cwt threshold. March corn 
is down 1 3/4 at $4.883 and March soybean meal is up $5.20 at $316.2. The Dow 
Jones Industrial Average is up 103.95 at 44,129.76.

LIVE CATTLE:

   Live cattle futures have rebounded from early-week pressure with 
triple-digit gains in all nearby contract months. Spot-month February futures 
are leading the upward market shift with gains of $2.20 per cwt as traders 
continue to hover near the $200 per cwt price level. At midmorning, February 
live cattle futures are at $199.25 per, with April futures close behind at $199 
per cwt. The ability to move prices to and above the $200 per cwt threshold 
could create not only additional buyer support across the complex, but there 
could be some additional long-term volatility added to the entire complex at 
current price levels. Cash cattle markets remain generally quiet following 
limited trade in the South on Tuesday. A few bids are now on the table in parts 
of Texas at midmorning at fully steady money with Tuesday's light Southern 
business, live deals were marked at $201, also fully steady with the prior 
week's weighted averages. The North was fairly quiet with just a handful of 
dressed trade reported in Iowa at $320, certainly not enough trade to establish 
any kind of an accurate trend for the week. Wednesday asking prices are around 
$202-plus in the South, but still not fully established in the North. February 
live cattle are $2.20 higher at $199.25, April live cattle are $1.68 higher at 
$199., June live cattle are $1.68 higher at $194.325. Boxed beef prices are 
Lower: choice down $0.19 ($331.86) and select down $1.11 ($318.44) with a 
movement of 81.95 loads (58.20 loads of choice, 8.91 loads of select, 6.07 
loads of trim and 8.77 loads of ground beef).

FEEDER CATTLE:

   Feeder cattle futures quickly followed the renewed market momentum seen in 
live cattle futures Wednesday morning. This has allowed for moderate gains in 
the lightly traded January contract, although most of the focus has surrounded 
the March contract, which posted gains more than $4 per cwt through much of the 
morning. Most of the trade activity is centered around the March and April 
futures contracts, combined with firm support through the entire live cattle 
complex as well as renewed pressure in grain markets, which has the potential 
to reduce feeding costs of cattle put in yards over the upcoming weeks. January 
feeders are $1.85 higher at $276.25, March feeders are $4.40 higher at $271.65 
and April feeders are $3.30 higher at $269.775.

LEAN HOGS:

   Lean hog futures are mixed in a narrow trading range early Wednesday 
morning. The active, triple-digit gains in cattle futures seem to have diverted 
most of trader attention and energy away from the lean hog complex for the time 
being. This could continue to keep trade volume and overall price movement 
limited through the rest of the session, although some late-day market activity 
could redevelop if outside markets start to shift from morning levels. The 
underlying softness in pork cutout values and concern about how future trade 
direction and talk of tariffs could impact overall global pork sales has 
traders slightly cautious; but for now, there is not expected to be any 
significant aggressive moves until more direct information is available to 
traders. February lean hogs are $0.20 higher at $81.4, April lean hogs are 
$0.10 lower at $86.6 and May lean hogs are $0.13 higher at $91.55. Hog Prices 
are higher on the Daily Direct Morning Hog report, up $4.13 with a weighted 
average of $81.33, ranging from $76.00 to $83.50 on 4,853 head with a five-day 
rolling average of $80.24. Pork Cutouts totaled 159.89 loads with 137.28 loads 
of pork cuts and 22.61 loads of trim. Pork cutout values are down $1.16 at 
$89.08.




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