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DTN Midday Livestock Comments          10/21 11:43

   Strong Early Gains Continue to Hold in Cattle Futures            

   Cattle futures posted strong early support Friday morning in reaction to 
limit higher live cattle trade Thursday. The early movement of traders helped 
to push prices $2 to $2.80 per cwt higher in nearby live cattle contracts. Hog 
markets posted firm gains as late-week buying quickly moved into nearby and 
deferred contract months.     

By Rick Kment
DTN Analyst


   Strong triple-digit gains have held through the morning Friday with October 
and December live cattle futures holding gains of $2.60 to $2.80 per cwt at 
midday. The lack of market activity developing across the complex through most 
of the morning is creating some caution, indicating extremely light volume, and 
the potential for wide late-day price adjustments. Lean hog futures remain 
firmly higher with December contracts posting gains over $1 per cwt as support 
from the aggressive cattle market has spilled into the hog complex. Corn prices 
are higher in light trade. December corn futures are 2 cents higher per bushel. 
Stock markets are mixed in light trade. The Dow Jones is 41 points lower while 
Nasdaq is up 8 points.


   Live cattle futures continue to post aggressive market gains midday Friday 
with two day market totals in nearby contracts nearing $6 per cwt gains. At 
this point, current support is still limited by October highs creating moderate 
resistance for the market, but the potential to move prices through these 
levels could spark additional commercial support through the last week of 
October. October and December live cattle contracts are holding gains of $2.65 
to $2.80 per cwt midday Friday with firm buyer support holding. The inability 
to spark additional strong buyer interest since the first hour of trade 
indicates that light activity level, and can cause reason for concern in the 
last hour of trade. Cash cattle markets are quiet Friday morning with bids seen 
in the South at $98 per cwt and $154 in the North. At this point, it is likely 
that trade may be delayed until after the afternoon cattle on feed report. The 
light steady trade in the North Thursday, combined with aggressive 
follow-through support in futures trade points to additional cash market 
support once the dust clears. Asking prices are seen Friday morning at $100 to 
$102 in the South and $159 in the North. Beef cut-outs at midday are mixed 
$0.16 lower (select) and up $2.08 per cwt (choice) with light movement of 66 
total loads reported (39 loads of choice cuts, 18 loads of select cuts, no 
loads of trimmings, 10 loads of ground beef). 


   Traders are quickly adjusting prices higher across all feeder cattle 
futures. All but October contracts are posting gains of $2 per cwt or greater 
at midday as the renewed support in the live cattle complex has created 
underlying support through the market. Currently traders expect additional 
little bearish news to develop from the cattle on feed report Friday afternoon 
as any pre-report adjustments appear to be focused on the expectation that 
supply side numbers will be steady to lower than early report projections. 


   Strong triple-digit gains have quickly developed Friday morning across 
December lean hog futures as traders continue to focus on the aggressively 
oversold spot month contract, but have just now found enough support to draw 
prices more than slightly higher. December lean hog futures are holding gains 
of $1.20 per cwt at midday, pushing prices to $42.30 per cwt. A close at this 
level of higher would post a gain in the weekly price chart, offsetting the 
strong market pressure seen through most of the week. The concern through the 
week has been the inability for gains to hold through the end of the trading 
sessions. This could once again be the case Friday, but with more aggressive 
price support midday Friday, it is going to take a significant market 
turnaround to erode current market support within the next two hours. Cash 
prices are lower on the National Direct morning cash hog report. The weighted 
average price fell $0.86 per cwt to $44.58 per cwt with the range from $42.50 
to $46.00 on 2,995 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa Minnesota Direct morning cash hog report. The 
National Pork Plant Report reported 139 loads selling with prices adding $1.50 
per cwt. Lean hog index for 10/19 is at $52.66 up $0.09 with a projected 
two-day index of $52.49 down $0.17. 

   Rick Kment can be reached at 


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