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DTN Midday Livestock Comments          07/21 11:49

   Firm Gains Develop in Cattle Futures in End of Week Positioning

   Moderate gains have redeveloped Friday morning in both live cattle and 
feeder cattle markets. This has allowed additional commercial buyer interest to 
step back into the complex late in the week, offsetting a portion of Thursday's 
losses. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Firm gains have developed in cattle trade Friday as traders are trying to 
counter the aggressive losses that swept through the complex Thursday 
afternoon. This may bring follow-through buyer activity within the next couple 
hours of trade in both live cattle and feeder cattle contracts. Corn prices are 
lower in light trade. September corn futures are 7 cents higher. Stock markets 
are lower in light trade. The Dow Jones is 53 points lower while Nasdaq is down 
5 points.

   LIVE CATTLE:

   Moderate buyer support has slowly moved into live cattle futures trade with 
the focus on increased buyer interest seen through the entire complex. Nearby 
futures are holding gains of 45 to 70 cents per cwt at midday, while lack of 
interest is seen in other nearby contracts with prices holding gains of 20 to 
40 cents per cwt. The overall lack of support in the complex Thursday led to 
aggressive pressure. But the ability to regain a portion of these losses at the 
end of the week could go a long way in adding stability to the cattle market 
next week and through the end of July. Cash cattle trade is undeveloped through 
the morning, as traders appear to be waiting for the cattle on feed report 
release Friday afternoon before stepping back into the market. Bids through the 
North are seen at $118 live and $188 dressed, which is currently $1 to $2 per 
cwt lower than last week. This could point toward steady money by the end of 
the week given the support in futures trade and unwillingness for feeders to 
budge at this point. Asking prices remain at $121 to $122 in the South and $190 
and higher in the North. Beef cut-outs at midday are lower, $0.99 lower 
(select) and down $0.74 per cwt (choice) with active movement of 90 total loads 
reported (56 loads of choice cuts, 14 loads of select cuts, 8 loads of 
trimmings, 12 loads of ground beef). 

   Feeder Cattle:

   Firm buyer support is holding in feeder cattle futures Friday morning with 
nearby contracts posting gains of $1 to $1.20 per cwt as the focus on 
underlying market support remains the main focus in all cattle trade after the 
sharp losses seen Thursday. Activity levels remain light as traders continue to 
look for additional longer term direction across the complex. The volatile and 
wild market shifts seen over the last couple of weeks have created such a back 
and forth shift in daily trade that these type of moves are almost expected.    

   LEAN HOGS:

   Light trade continues to be seen through the entire lean hog complex Friday 
morning with August futures holding strong underlying support of 67 cents per 
cwt. This is sparking some light to moderate buyer support through most other 
contracts with all but December contracts trading steady to 25 cents per cwt 
higher. The overall lack of pressure in the complex at the end of the week is 
helping traders square positions with nearby contracts stuck in the moderate to 
wide trading range seen over the last couple of weeks. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$1.14 at $83.07 per cwt with the range from $78.00 to $84.50 on 3,998 head 
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash 
hog report. The weighted average price fell $1.46 at $83.39 per cwt with the 
range from $78.00 to $84.50 on 1,840 head reported sold. The National Pork 
Plant Report reported 141 loads selling with prices falling $1.07 per cwt. Lean 
hog index for 7/19 is at $92.00 down $0.40 with a projected two-day index of 
$91.67, down $0.33.   

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


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