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DTN Midday Livestock Comments          12/13 11:45

   Cattle Futures Pull Back From Early Gains

   Firm losses have quickly developed across the cattle complex with traders 
focusing on the inability to draw additional commercial buyer interest back 
into the market. This may spark additional weakness across the market through 
the end of the day.

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Strong pressure has redeveloped in cattle trade through the morning 
Wednesday. This has quickly replaced the strong market surge seen early in the 
session and is also eroding support seen early in the week. Mixed lean hog 
futures trade is limiting additional market direction. Corn prices are higher 
in light trade. March corn futures are 1 cent per bushel higher. Stock markets 
are higher in light trade. The Dow Jones is 131 points higher, while Nasdaq is 
up 22 points.

   LIVE CATTLE:

   Moderate selling pressure has developed across all live cattle trade midday 
Wednesday. This overall lack of support is not only creating some concerns that 
traders are looking for follow-through stability after the previous market 
gains but also may be now trying to adjust to renewed liquidation. Trade 
remains sluggish at this point, although there is likely to be some additional 
pressure developing through the end of the session. Cash cattle markets are 
becoming more active midday Wednesday with live bids seen in all areas at $114 
to $115 per cwt. This is steady to $1 per cwt higher than the few token bids 
that developed Tuesday, but still well under asking prices of $119 to $120 per 
cwt live basis. Activity for dressed trade remains undeveloped with bids and 
asking prices still hard to find at this point in the week. The Fed Cattle 
Exchange Auction today listed a total of 704 head, with 75 actually sold, 246 
head listed as unsold, and 383 head listed as PO (Passed Offer). The 
state-by-state breakdown looks like this: KS 318 total head, with 75 head sold 
at $116.00, 59 head unsold, 184 head listed as PO ($116.00); NE 121 total head, 
with zero head sold, 121 head unsold, and zero head listed as PO; TX 265 total 
head, with zero head sold, 66 head unsold, and 199 head listed as PO ($116.00); 
CO -- no cattle reported; IA -- no cattle reported; other states -- no cattle 
reported. The delivery date/weighted average breakdown is as listed: 1-9 day 
delivery: 704 head total, 75 head sold, with a weighted average price of 
$116.00; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no 
cattle reported; 17-30 day delivery -- no cattle reported. Beef cut-outs at 
midday are lower, $0.11 lower (select) and down $1.05 per cwt (choice) with 
active movement of 105 total loads reported (67 loads of choice cuts, 18 loads 
of select cuts, 11 loads of trimmings, 10 loads of ground beef). 

   FEEDER CATTLE:

   Feeder cattle futures have posted moderate to firm losses at midday after 
giving back all of the early market support. The overall lack of direction in 
the complex and concern that increased pressure may quickly sweep back into the 
market through the end of the week has pulled back from the early week gains. 
Feeder cattle futures are holding losses of 40 cents to $1.20 per cwt as trade 
activity remains sluggish, but any sense of widespread support has evaporated 
at this point. 

   LEAN HOGS:

   Narrow trade ranges have continued to develop in lean hog futures following 
the initial morning market shift. This has left prices generally unsupported, 
and traders are looking for increased market direction through the morning with 
prices hovering on either side of unchanged. The sharp pressure in pork values 
and weakness in cash trade may add pressure to the complex over the near 
future. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price is down $0.54 at $57.58 per cwt with the range from 
$50.00 to $59.20 on 4,418 head reported sold. Cash prices are lower on the 
Iowa/Minnesota Direct morning cash hog report. The weighted average price fell 
$1.01 at $56.65 per cwt with the range from $50.00 to $58.00 on 1,848 head 
reported sold. The National Pork Plant Report posted 307 loads selling with 
carcass values falling $4.59 per cwt. Lean hog index for 12/11 is at $64.97 
down $0.20 with a projected two-day index of $64.86, down $0.11.

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


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