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DTN Midday Livestock Comments          05/26 11:45

   Firm Gains Develop Through Cattle Trade at Midday 

   Strong midday buyer support quickly offset early pressure in the cattle 
complex. The lack of trade volume in the complex has allowed for prices to 
swing quickly and in a wide range Thursday morning. Lean hog futures posted 
firm gains, holding strong gain in nearby contracts. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Moderate to strong gains have developed across the livestock complex at 
midday following a choppy and somewhat volatile morning led by lightly traded 
cattle markets. The lack of trade volume has led to wide price swings in either 
direction in both live cattle and feeder cattle markets, accounting for some 
uncertainty through the rest of the week. Corn prices are higher. July corn 
futures are 3 cents higher. Stock markets are lower in light trade. The Dow 
Jones is 38 points lower while Nasdaq is down 2 points.

   LIVE CATTLE:

   Firm support is seen in August and October live cattle futures at midday, 
otherwise the complex remains stuck in a narrow trading range at midday. The 
live cattle market has continued to waver in a wide price range through the 
morning with very little market activity expected to be seen through the end of 
the session as volume remains light. Cash cattle activity is starting to 
develop with light trade starting to pick up with sales in the South at $125 
and $197 to $198 in the North. This is improved over the Northern dressed bids 
yesterday, and may be able to spark additional strong interest at this level. 
It may not be enough to finish out the week. But the desire of both sides would 
be to finish active trade before the end of the week. Asking prices are holding 
around $128 and higher in the South and $200 and higher in the North. Beef 
cut-outs at midday are mixed $0.98 lower (select) and up $0.51 per cwt (choice) 
with light movement of 61 total loads reported (27 loads of choice cuts, 23 
loads of select cuts, 4 loads of trimmings, 6 loads of ground beef).

   FEEDER CATTLE: 

   Wide price swings have been seen through the feeder cattle futures as light 
trade volume continues to hover through the market. The ability to bring buyers 
back into the market following the early triple-digit losses seen during 
morning trade has created some follow through momentum that could be carried 
into the holiday weekend. Trade volume is still expected to remain light, as 
traders remain cautious with the expectations that overall cattle numbers 
remain strong compared to year-ago levels and are not expected to ease any time 
soon. 

   LEAN HOGS:

   Strong gains have quickly developed through the lean hog futures market, 
pushing nearby contacts back above the $80-per-cwt price level. This has given 
the entire complex a sense of momentum as traders remain focused on additional 
buyer interest and additional interest over the market. Cash prices are lower 
on the National Direct morning cash hog report. The weighted average price fell 
$1.13 per cwt to $72.31 per cwt with the range from $64.00 to $73.50 per cwt on 
2,790 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 126 loads selling with prices down $2.06 per cwt. Lean hog 
index for 5/23 is at $78.96, up 0.03 with a projected two-day index of $78.87, 
down 0.09.

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


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