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DTN Midday Livestock Comments          03/22 11:50

   Triple-Digit Gains Develop in Cattle Trade    

   Cattle trade posted strong market support Wednesday morning as 
follow-through buyer interest quickly developed across the entire complex. The 
support seen in cattle markets is eroding early interest in the hog trade with 
prices trading mostly lower at midday. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Buyer support has flooded into cattle markets Wednesday with triple-digit 
gains seen in both live cattle and feeder cattle trade. The combination of 
technical and fundamental support continues to drive buyers back into the 
market. Hog trade has backed away from the early morning support. With most 
contracts holding moderate losses at midday. Corn prices are lower in light 
trade. May corn futures are 2 cents lower. Stock markets are mixed in light 
trade. The Dow Jones is 36 points lower while Nasdaq is up 11 points.

   LIVE CATTLE:

   Following the break through resistance levels on Tuesday and faced with the 
possibility of another round of higher cash cattle trade this week, traders 
have remained increasingly bullish Wednesday morning. This has posted 
triple-digit gains in all contracts with nearby futures holding gains more than 
$2 per cwt. April and June futures are trading $2.70 to $2.80 per cwt higher 
with the potential of hitting the daily trading limit is a growing possibility. 
Cash cattle activity on the Fed Cattle Exchange Auction report today listed a 
total of 3,928 head, with 2,195 actually sold, and 1,733 head listed as unsold. 
The state by state breakdown looks like this: KS 147 head at $130.00; NE 1,825 
head at $133.00-$136.50; TX 223 head, at $128.00-$129.50; CO no test; IA no 
test; other states, no test. The weighted average was $133.35, up $4.96 from 
last week's weighted average of $128.39. Trade in feedlot country is still 
undeveloped, but higher bids are seen through late morning. Bids of $126 are 
developing in the South and Northern bids of $210 to $213 have surfaced. The 
higher end of these bids are seen at regional packers. Asking prices are also 
firming with Southern cattle priced at $132 to $134 per cwt, and $215 and 
higher in the North. At this pace, another week of Wednesday trade is possible. 
Beef cut-outs at midday are mixed, $1.55 higher (select) and down $1.50 per cwt 
(choice) with moderate movement of 84 total loads reported (59 loads of choice 
cuts, 12 loads of select cuts, no loads of trimmings, 14 loads of ground beef). 

   FEEDER CATTLE: 

   Sharp triple-digit gains are holding in feeder cattle futures Wednesday 
morning following the aggressive nature of live cattle trade. March futures 
remain firmly higher with a 42.25 per cwt gain although trade in the March 
contract remains light. The remainder of nearby contracts are holding even more 
aggressive support with prices $3 to $3.70 per cwt higher. The overall momentum 
seen in the cattle market over the last two weeks has gone unchecked, with 
traders ratcheting prices higher on combined fundamental and technical support. 
 

   LEAN HOGS:

   Early support across the lean hog futures market fell flat on its face 
through the morning trading session as the light short covering that quickly 
developed could not draw additional buyer support back into the complex. April 
futures still is able to scratch out a positive price move at midday, with 
gains seen at 15 cents per cwt. But the rest of the complex is trading lower. 
Losses of 12 to 57 cents per cwt are holding through late morning, which is 
likely to weaken the overall tone of the market near closing bell. The lack of 
support in pork values is adding to the longer term market uncertainty. Cash 
prices are lower on the National Direct morning cash hog report. The weighted 
average price fell $1.13 at $65.06 per cwt with the range from $60.00 to $67.00 
on 3,592 head reported sold. Cash prices are unreported due to confidentiality 
on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant 
Report reported 186 loads selling with prices falling $1.57 per cwt. Lean hog 
index for 3/17 is at $71.61 down $0.13 with a projected two-day index of $71.48 
down $0.13. 

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


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