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DTN Midday Livestock Comments          10/19 11:58

   Uniform Pressure Developing Tuesday

   Livestock future values eroded during morning trade Tuesday with narrow 
losses in most live cattle and feeder cattle contracts. Lean hog futures are 
posting more noticeable price pullbacks as traders adjust positions following 
aggressive gains over the past two days. Trade is expected to remain sluggish 
through the end of the day.

By Rick Kment, Contributing Analyst


   Trade is generally sluggish Tuesday with narrow losses redeveloping in live 
cattle and feeder cattle futures. The most aggressive losses are in lean hog 
futures but given the $2 to $3 per cwt rally over the past two sessions, there 
is very limited concern that these market reductions are anything more than 
position adjustments. December corn is down 2 cents per bushel and December 
soybean meal is up $4.80 per ton. The Dow Jones Industrial Average is up 156 
points with Nasdaq up 103 points.


   Live cattle futures posted narrow losses in most contracts early Tuesday 
with prices from 27 cents lower to 5 cents higher. At this point, the only 
contract posting a gain is February. The lack of activity in the rest of the 
market is leaving it generally stable. Growing market stability in beef values 
and the hopes that cash cattle prices will be no worse than steady by the end 
of the week are expected to limit downside pressure in the complex. Cash cattle 
markets are still quiet, which is typical for a Tuesday morning. A few asking 
prices in the South are seen at $126 and higher per cwt. This again is expected 
as feeders look at this week to help direct the cash cattle market higher, 
hopefully setting the trend for the rest of the year. Asking prices in the 
North are still undeveloped as are bids in all areas. It is likely to be 
Wednesday or later before measurable trade develops. Tuesday morning's boxed 
beef prices are higher in light trade, with choice cuts $0.72 higher at $280.81 
and selects up $0.1.82 at $261.63 on a total count of 66 loads. Dow Jones 
estimated Tuesday's cattle slaughter at 121,000 -- 1,000 less than a week ago 
and 1,000 more than year ago levels.


   Light follow-through pressure is developing in feeder cattle futures Tuesday 
morning. Nearby contracts are heavily influenced by Monday's losses, although 
the underlying weakness in the complex may continue to add selling activity the 
rest of Tuesday. October futures are 55 cents per cwt lower, but still holding 
above the $155 per cwt price level. Although this level does not indicate 
significant technical support, a move below these prices could spark another 
round of moderate to active selling as traders seem somewhat hesitant 
concerning September placement levels and how this may spark additional 
volatility over the next week. The CME Feeder Index was priced at $153.90 for 
Oct. 15.


   Active pressure is seen in lean hog futures with triple-digit losses in all 
but May contracts. Although a move lower is disappointing, following such 
active gains as seen over the last two sessions, a Tuesday pullback of this 
nature is not totally unexpected. Prices remain above last week's support 
levels and any price above these levels is expected to limit aggressive market 
liquidation in the near future. Cutouts are up $1.64 at $102.42 Tuesday morning 
on 239.30 loads. Negotiated hog prices are unavailable at this time due to 
packer submission issues. Dow Jones estimated Tuesday's hog slaughter at 
478,000 -- 3,000 less than a week ago and 2,000 less than year ago levels. The 
CME Lean Hog Index is listed at $86.88 per cwt for Oct. 15.

   Rick Kment can be reached

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