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DTN Midday Livestock Comments          01/16 12:07

   Hog Futures Tumble Lower

   Sharp triple-digit losses have quickly flooded into lean hog contracts 
Wednesday morning. Nearby contracts are trading $2 per cwt lower as traders 
quickly push prices lower.

By Rick Kment
DTN Analyst

General Comments

   Markets have moved mostly lower Wednesday morning with live cattle trade 
hovering in a narrowly mixed range. Strong triple-digit losses have developed 
in feeder cattle and lean hog trade as the focus on additional market 
liquidation has sparked increased market movement through the entire complex. 
Corn markets are higher in light trade. March corn futures are 2 cents higher. 
Stock markets are higher in light trade. Dow Jones is 155 points higher with 
Nasdaq up 21 points. 

   LIVE CATTLE:

   Narrowly mixed trading ranges have continued in live cattle futures despite 
strong pressure through the rest of the livestock market. Prices have remained 
mixed through most of the morning, but contained in a 20 cent per cwt trading 
range in all nearby contracts. Even though buyer interest has been hard to 
sustain Wednesday, the focus on recent market support is helping to create 
needed stability through the entire complex. Cash trade still remains 
undeveloped, although a few token bids have slowly trickled into the market 
with dressed bids of $197 per cwt. Asking prices are starting to become more 
evident through the morning with prices listed at $127 to $130 live and $198 to 
$200 dressed. Active trade is still expected to be delayed until sometime 
Thursday or Friday. Boxed Beef cut-outs at midday are mixed, $0.85 higher 
(select) and down $0.05 per cwt (choice) with light movement of 82 total loads 
reported (50 loads of choice cuts, 11 loads of select cuts, 10 loads of 
trimmings, 11 loads of ground beef).

   FEEDER CATTLE:

   Triple-digit losses have developed in feeder cattle contracts with nearby 
contracts holding losses of $1 to $1.45 per cwt. This pullback in price levels 
has created some increased concerns about follow through pressure based on 
increased corn market prices. The focus on readily available cattle numbers 
through the spring and summer is not only depressing price levels, but has 
eliminated any premium in the market with January and March futures not trading 
just pennies apart, while all contract through May contained in a $1 per cwt 
price spread. Limited activity is expected to be seen through most contacts 
through the rest of the session.

   LEAN HOGS: 

   Sharp losses have quickly flooded into the complex Wednesday morning with 
nearby contracts holding $2.30 to $2.50 per cwt losses through late morning. 
Trade volume has slowed through the last half of the morning although the 
bearish tone in the market continues to add uncertainty to the entire complex. 
Nearby losses have broken through nearby support levels as markets shifting 
below January lows through the morning. This could add additional weakness 
through the rest of the session, and likely the end of the week. Cash prices 
are lower on the National Direct morning cash hog report. The weighted average 
price is down $0.06 at $51.38 per cwt with the range from $47.00 to $53.00 on 
6,409 head reported sold. Cash prices lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price is down $0.50 at $50.97 per 
cwt with the range from $47.00 to $53.00 on 2,579 head reported sold. Pork 
carcass values are higher on the morning report with prices gaining $0.20 per 
cwt at $70.53 per cwt with 215 loads traded. Lean hog index for 1/14 is $57.65, 
up 0.44, with a projected two-day index is $58.02, up 0.37. 

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


(CZ)

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