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DTN Midday Livestock Comments          02/12 12:08

   Cattle Prices Slide Lower Friday Morning                

   Traders are preparing for the three-day holiday weekend as Markets will 
remain closed Monday in observance of Presidents Day. Cattle futures have 
eroded lower through the morning despite early-morning buyer interest stepping 
into the market. This lack of support is creating concern about long-term 
support and focusing on the cash cattle market pressure seen over the past two 
weeks. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Moderate pressure has developed Friday morning as early morning buyer 
support was unable to hold in both live cattle and feeder cattle markets. Lean 
hog futures are advancing support which started Thursday, based on stability in 
market fundamentals. Trade is expected to remain sluggish through the rest of 
the complex, which could limit market ranges at closing bell. Futures markets 
will remain closed Monday for President's Day, opening Tuesday. Corn prices are 
lower. March corn futures are 0.5 cent lower. Stock markets are higher in 
active trade. The Dow Jones is 245 points higher while Nasdaq is up 56 points.

   LIVE CATTLE:

   Follow-through pressure has developed through the entire live cattle futures 
market as early buyer support has quickly eroded Friday morning. The concern 
that the pressure in cash markets will continue to add pressure through the 
rest of the month despite the tightening beef supplies is creating additional 
underlying concerns in both nearby and deferred contracts. But live cattle 
futures remain technically stuck within a wide trading range, which may 
continue to keep prices wandering higher and lower through most of the spring. 
Cash cattle activity has developed through the morning with trade in the South 
likely to be essentially wrapped up for the week with trade seen at $133. This 
is $3 per cwt lower than last week and $1 lower than trade Wednesday. A few 
deals are starting to trickle in in the North at $206, which would be around $4 
per cwt lower than last week, but mostly bids are still holding at this level. 
Trade may be done by the end of the day, given the defensiveness of futures 
markets and outside market pressure. Beef cut-outs at midday are lower, $1.00 
lower (select) and down $0.35 per cwt (choice) with light movement of 61 total 
loads reported (40 loads of choice cuts, 12 loads of select cuts, no loads of 
trimmings, 10 loads of ground beef). Cash cattle markets remain quiet following 
moderate to active trade Thursday with prices $3 to $4 per cwt lower than last 
week.

   FEEDER CATTLE:

   The inability to hold early market support through feeder cattle contracts 
has sparked additional pressure in summer contracts, with May and August 
futures holding $1 per cwt losses. The lack of support in cash markets as well 
as lackluster interest in live cattle markets has limited additional buyer 
interest across the entire feeder cattle complex. 

   LEAN HOGS:

   Light trade volume through the end of the week is limiting overall market 
direction through the entire lean hog complex. This is unable to bring 
additional seller pressure into nearby contracts, as February through July 
futures continue to hold moderate gains at midday, firming buyer interest at 
the end of the week. The strong pressure seen in outside markets earlier in the 
week has had the most impact on deferred contracts, pushing late fall and 
winger contracts moderately lower through the end of the trading session 
Friday. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price fell $1.90 per cwt to $61.06 per cwt with the range 
from $52.00 to $62.50 per cwt on 3,463 head reported sold. Cash prices 
unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog 
report. The National Pork Plant Report reported 135 loads selling with prices 
up $0.38 per cwt. Lean hog index for 2/10 is at $65.60 up 0.31, with a 
projected two-day index of $65.91, up 0.31. 

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


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