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DTN Midday Livestock Comments          04/17 11:50

   Cattle Futures Fall Out of Bed

   Early support in the cattle market seemed to set the tone for an inactive 
and quiet end of the week, protecting support seen earlier in the week. But 
sharp triple-digit losses that flooded the market at midday have created some 
underlying concern about the ability to maintain support on the weekly charts.

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Livestock futures are sharply lower late Friday morning after cattle markets 
have moved from a quietly traded market to aggressive selling pressure due in 
most part to lack of volume. The inability to hold early gains could continue 
to erode any weekly support seen across the complex. Corn prices are higher in 
light trade. May corn futures are 3 cent per bushel higher. Stock markets are 
lower in light trade. The Dow Jones is 245 points lower, while the Nasdaq is 
down 71 points.

   LIVE CATTLE:

   The sharp triple-digit losses seen late Friday morning once again remind 
most in the market how quickly the market tone can change. Lack of overall 
volume and thin buyer interest at the end of the week quickly gave way to a 
market that dropped out of sight. After traders were unable to expand or even 
hold the narrow gains which held most of the morning. This left a vacuum of 
buyer interest, allowing markets to post nearly $2-per-cwt losses in nearby 
contracts. At current price levels, a higher weekly close will still be 
sustained, but this is even in danger if follow-through pressure develops just 
before closing bell. Cash cattle trade is starting to develop with a few sales 
in the South at $161 per cwt. This would be about $2 lower than last week's 
levels, but at this point, there isn't enough activity to set the tone of the 
market or establish a trend. Bids are seen in the North from $256 to $260 
dressed basis, but so far, there is no evidence of trade in these areas. Asking 
prices remain at $165 and higher in the South and $265 and higher in the North. 
Beef cut-outs at midday are mixed, $0.48 higher (select) and down $2.69 per cwt 
(choice) with moderate movement of 94 total loads reported (44 loads of choice 
cuts, 25 loads of select cuts, eight loads of trimmings, 18 load of ground 
beef).

   FEEDER CATTLE:

   Trade seen Friday is a quick reminder how fragile and unsecure footing is 
when markets move higher. The light-to-moderate support seen through most of 
the morning has been quickly dashed as prices have quickly posted $1- to 
$2-per-cwt losses at midday. The combination of softness in beef values as well 
as concern of lower cash cattle trade quickly wiped out the few buyers that had 
stepped into the market. This could add additional uncertainty to the complex 
through the end of the week.  

   LEAN HOGS:

   Moderate pressure has been seen through the entire morning as traders 
continue to backpedal away from the narrow bounce higher seen Thursday. Any 
sense of market stability has been dashed as aggressive triple-digit losses 
have flooded into the neighboring cattle complex, setting the weaker tone for 
lean hog futures as traders look toward the weekend. Nearby contracts are 
hovering from 55 to 80 cents per cwt lower with additional losses likely before 
closing bell. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price lost $0.95 per cwt to $61.19 per cwt with 
the range from $54.00 to $62.50 per cwt on 6,718 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 149 loads 
selling as prices adding $0.49 per cwt. Lean hog index for 4/14 is at $62.98 up 
0.82, with a projected two-day index of $63.73 up 0.75.  

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


(BAS)

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