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DTN Midday Livestock Comments          12/18 11:58

   Cattle Futures Maintain Triple-Digit Gains                  

   Strong buyer support continues to hold in the live cattle and lean hog 
futures following the break away from limit-down trade in the feeder cattle 
market. Traders are expected to focus on building a sense of stability through 
the end of the week. 

By Rick Kment
DTN Livestock Analyst



GENERAL COMMENTS: 

   Strong gains have quickly redeveloped and held through the live cattle and 
lean hog futures market due to feeder cattle futures breaking away from the 
limit-down trade seen over the past week. This could help to bring some 
stability to the entire complex heading into the holiday week. Corn prices are 
higher in light trade. March corn futures are 2 cents per bushel lower. Stock 
markets are higher in light trade. The Dow Jones is 298 points higher while 
Nasdaq is up 74 points.

   LIVE CATTLE:

   Firm triple-digit gains continue to hold through the live cattle complex as 
traders focus on trying to reestablish a sense of stability at the lower 
levels. Nearby futures appear to be starting to set roots around $156 to $157 
per cwt, but there is expected to be some additional market volatility over the 
coming weeks. The holiday season typically erodes overall trade volume and can 
easily spark some additional market shifts which will put the focus on market 
direction through the first few weeks of 2015. Cash cattle trade is quiet 
Thursday morning, although bids have redeveloped at $156 live basis and $249 to 
$250 per cwt dressed. It is uncertain just how much activity will be seen 
through the end of the week, although it is expected that some additional 
volume would need to be secured in the North before the end of the week. But 
with the holiday weeks on the doorstep, nothing is for certain. Asking prices 
on cattle yet on showlists are around $158 and higher in the South and $252 and 
higher in the North. Beef cut-outs at midday are mixed, $0.57 lower (select) 
and up $0.11 per cwt (choice) with active movement of 90 total loads reported 
(35 loads of choice cuts, 19 loads of select cuts, 18 loads of trimmings, 19 
loads of ground beef).

   FEEDER CATTLE:

   A breakaway from consistent limit-down trade seen over the last few trading 
sessions seems to be giving some additional support to the complex. Although 
the market remains cautious as there is still some significant pressure holding 
in the lightly traded January contracts, the ability for traders to see 
positive price moves in nearby and deferred futures contracts seems to be 
helping to spark some spillover interest in the live cattle market. 

   LEAN HOGS:

   Firm triple-digit gains are holding at midday with traders putting most of 
their attention on the bounce higher in the cattle complex. This has allowed 
buyer support to step into the entire livestock market, allowing firm 
triple-digit gains to be generally uncontested at this point. Soft market 
fundamentals will likely limit further long-term support, but short-term 
position-squaring is the main order of business Thursday. Cash prices are lower 
on the National Direct morning cash hog report. The weighted average price fell 
$1.15 per cwt to $76.55 per cwt with the range from $68.00 to $78.00 per cwt on 
3,121 head reported sold. Cash prices are unreported due to confidentiality on 
the Iowa Minnesota Direct morning cash hog report. The National Pork Plant 
Report is reported 177 loads selling as prices fell $0.62 per cwt. Lean hog 
index for 12/16 is at $85.95 down 0.65, with a projected two-day index of 
$85.15 down 0.80.

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


(SK)

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