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DTN Midday Livestock Comments          04/22 12:02

   Cattle Futures Hold Strong Gains

   Strong gains have developed through most cattle futures contracts as traders 
focus on firming beef values. The expectation that beef demand will continue to 
firm into the traditional summer season could help support additional buyer 
interest. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Moderate to strong buyer support has developed through most livestock 
contracts Tuesday. Firming gains in cattle futures continue to extend gains, 
which started to develop late Monday. Morning gains in lean hog futures are 
expected to be associated with short covering activity following the aggressive 
losses Monday. Corn futures are higher at midday. May corn futures are 7 cents 
per bushel higher. Stock markets are higher in light trade. The Dow Jones is 
104 points higher while Nasdaq is up 41 points.

   LIVE CATTLE:

   Firming support has developed through the morning Tuesday with buyers 
focusing on summer contracts and the expectation of stronger beef demand. The 
aggressive gains seen in morning boxed beef values have helped to sustain 
initial buyer activity through the entire cattle complex. April contracts are 
holding moderate gains of 30 cents per cwt, although all other nearby contracts 
are posting more aggressive support as traders narrow the price spread with 
front month futures. Cash cattle markets remain undeveloped at this point, but 
that isn't surprising given it seems to be the typical pattern for a Tuesday. 
Bids are undeveloped and may start to be floated by midweek, but both sides 
appear to be more focused on moving the cash position in their direction than 
timely completion of the weekly sales process. Asking prices are at $148 and 
higher in the South and $238 and higher in the North. Beef cut-outs at midday 
are higher, $1.23 per cwt higher (select) and up $2.26 per cwt (choice) with 
light movement of 68 total loads reported (27 loads of choice cuts, 26 loads of 
select cuts, three loads of trimmings, 12 loads of ground beef).

   FEEDER CATTLE:

   Buyers have quickly returned to the feeder cattle futures market following 
the building support in nearby and deferred live cattle futures. Longer term 
support in live cattle prices and expectations of firming beef values could 
help to draw additional buyer support back into the market. Contracts in the 
fourth quarter of the year are posting strong triple-digit gains, while nearby 
futures are supportive, but limited to 50 to 80 cent per cwt gains. 

   LEAN HOGS:

   Aggressive losses seen early Tuesday morning seemed to be carried over from 
active early-week liquidation that developed Monday. But seller's interest 
quickly faded through the morning, allowing moderate to strong buyer support to 
flood the market by midday. June and July contacts continue to set the trend 
for the market, posting 75 to 85 cent per cwt gains near midday. Additional 
buyer support is expected to slowly develop through the rest of the session, 
helping to confirm moderate to strong gains in most nearby contract months. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price fell $2.85 per cwt to $110.20 per cwt with the range 
from $105.00 to $111.00 per cwt on 378 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 137 loads with prices falling 
$0.84 per cwt. Lean hog index for 4/18 is at $119.65 down 1.21, with a 
projected two-day index of $118.48 down 1.17. 

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


(SK)

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