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DTN Midday Livestock Comments          11/21 11:46

   Cattle Futures Rally After Report

   Active price support quickly moved into the live cattle and feeder cattle 
futures trade following the cattle on feed report. Lighter than expected cattle 
placements through the month of October is firming the market tone Wednesday.

By Rick Kment
DTN Analyst

General Comments

   Strong midday gains have swept through cattle trade following the release of 
the cattle on feed report. Due to the holiday, the report was released early 
and during trading hours. This sparked strong triple-digit gains to develop in 
nearby live cattle futures and through the feeder cattle complex. Corn markets 
are higher in light trade. December corn futures are 1/2 cent higher. Stock 
markets are higher in light trade. The Dow Jones is 124 points higher while 
Nasdaq is up 95 points.

   LIVE CATTLE:

   Strong gains have flooded the live cattle futures market at midday following 
the cattle on feed report which was released early due to the holiday. Having 
the report released during trading hours adds some potential volatility to the 
market where normally traders would have the weekend to mull over on feed and 
placement numbers. Lighter than expected on feed numbers and increased 
marketing is helping to spark the limited amount of trade seen in the market. 
December futures are holding gains of $1.17 per cwt, moving near $117 per cwt 
at midday. Other nearby contracts are holding $1.50 to $1.65 per cwt gains, 
while deferred contracts have firmed from 60 to 80 cents per cwt. Cash cattle 
trade remains undeveloped midday with both sides likely not showing much 
interest until after the release of the cattle on feed report. It is likely 
that asking prices will firm based on the report results and futures reaction, 
which may allow for packers to be more aggressive then they had expected. Both 
sides desire to finish business before the end of the day, but returning Friday 
is possible as a last resort. Boxed Beef cut-outs at midday are mixed, $0.09 
higher (select) and down $0.40 per cwt (choice) with light movement of 86 total 
loads reported (41 loads of choice cuts, 13 loads of select cuts, 8 loads of 
trimmings, 24 loads of ground beef).

   FEEDER CATTLE:

   Active buying has flooded into the feeder cattle futures following the early 
release of the cattle on feed report Wednesday morning. The sluggish support 
seen through most of the morning has been quickly replaced by triple digit 
gains. January futures are holding a $2.35 per cwt gain at midday following a 
lower than expected cattle placement in the month of October. This could spark 
some additional buyer support short term, but is not likely to create 
aggressive long term market moves in the complex due to most other market 
factors unchanged.

   LEAN HOGS:

   February lean hog futures continue to lead the market lower Wednesday 
morning with prices holding 87 cents per cwt lower. Although early losses have 
nearly been cut in half, the overall lack of support in the complex is based 
more on limited interest, and not changing market conditions. Given the sharp 
rally seen over the last two weeks, the price pressure over the last couple of 
days is seen more as a market correction than the start of a trend. Prices are 
expected to shift in a narrow to moderate range over the next few days as 
active trade will not be seen until early next week. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price is 
$0.52 lower at $50.85 per cwt with the range from $46.00 to $51.70 on 4,118 
head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning 
cash hog report. The weighted average price is $1.51 lower at $49.83 per cwt 
with the range from $46.00 to $51.50 on 1,248 head reported sold. The National 
Pork Plant Report posted 215 loads selling on the morning report. Pork carcass 
values added $1.16 per cwt at $66.88 per cwt. Lean hog index for 11/19 is 
$58.23, down 0.28, with a projected two-day index of $58.02, down 0.21. 

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


(CZ)

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