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DTN Midday Livestock Comments          11/25 12:11

   Cattle Futures Slide Sharply Lower

   Cattle futures are under pressure following sharp losses in feeder cattle 
trade during Tuesday morning. Lean hog futures started firmly higher, but lost 
support and continued to move lower near midday.   

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Cattle futures continue to hold moderate to strong losses in the feeder 
cattle complex. This pressure has limited buyer support through the live cattle 
complex. Early buyer support in the lean hog markets quickly eroded following 
the pressure in the cattle complex. Corn prices are higher in light trade. 
December corn futures are 3 cents per bushel higher. Stock markets are higher 
in light trade. The Dow Jones is 23 points higher while Nasdaq is up 2 points.

   LIVE CATTLE:

   Movement in the live cattle futures market is stuck in a tale between light 
nearby contract buyer support and deferred contracts trying to keep up with 
feeder cattle losses. Extremely light trade through the overall live cattle 
market continues to limit market direction through the session. It is uncertain 
just how much additional activity will develop through the end of the session, 
and if current prices will move significantly through. Cash cattle activity 
remains dead in the water with no bids developed. Although there is a strong 
desire by both sides to get needed business done by Wednesday before the 
Thanksgiving break, the uncertainty about how many cattle actually need to move 
due to the beginning of the month rolling around next week may keep markets 
undeveloped. Asking prices are still hard to closely pin down, but the few that 
are seen are around $175 in the South and $272 to $274 in the North. Beef 
cut-outs at midday are higher, $2.25 higher (select) and up $0.47 per cwt 
(choice) with light movement of 68 total loads reported (31 loads of choice 
cuts, 15 loads of select cuts, nine loads of trimmings, 14 loads of ground 
beef).

   FEEDER CATTLE:

   Triple-digit losses continue to hold through the feeder cattle market, even 
though prices have significantly backed off of early session lows. It appears 
that traders remain comfortable holding trading ranges between $1 and $2 per 
cwt lower in most contracts, as very little additional outside market direction 
or fundamental market moves would suggest further market activity. January 
futures are holding $1.47 per cwt losses, with contracts holding at $231.90 per 
cwt at midday.   

   LEAN HOGS:

   What started out as a promising follow through to the rally started Monday 
is creating some waves as pressure from the cattle market has completely erased 
initial gains and created moderate to strong pressure at midday. Trade volume 
remains light and ultimately much of the explanation of how and why markets are 
moving in the current fashion is going to be shoved into the "it's a holiday 
week" category, which seems to be a catch all for wild and erratic moves due to 
extremely light volume and lackluster trader interest. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$1.28 per cwt to $84.46 per cwt with the range from $83.89 to $87.00 per cwt on 
3,041 head reported sold. Cash prices are lower on the Iowa Minnesota Direct 
morning cash hog report. The weighted average price fell $0.38 per cwt to 
$86.23 per cwt with the range from $84.00 to $87.00 per cwt on 111 head 
reported sold. The National Pork Plant Report is reported 309 loads selling as 
prices gained $0.606 per cwt. Lean hog index for 11/21 is at $88.78 down $0.08, 
with a projected two-day index of $88.74 down 0.04.

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


(SK)

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