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DTN Midday Livestock Comments          02/10 11:53

   Moderate Gains Hold Through Live Cattle Trade               

   Trade has slowed in cattle futures with the focus on early contract highs 
slowly eroding through the trading session. Moderate gains continue to hold in 
both live cattle and feeder cattle futures, while lean hog futures are showing 
moderate pressure. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Cattle futures continue to trade higher at midday, but have given back a 
significant portion of early market support. This is creating some additional 
concern about the ability to draw additional late day support to the market and 
causing questions about how much underlying support is currently under the 
market at this point. Lean hog futures have broken away from the sideways 
pattern seen over the last week, with moderate pressure developing at midday. 
Corn prices are lower. March corn futures are 1/4 cents lower. Stock markets 
are higher in active trade. The Dow Jones is 66 points higher while Nasdaq is 
up 75 points.

   LIVE CATTLE:

   Gains continue to hold at midday, with February futures trading $1 per 
higher. The inability to build on early morning buyer support or even to 
maintain the initial interest seems to have created some underlying concern 
that market activity may follow the pattern seen Tuesday when markets closed 
mostly lower after holding strong early gains. It is uncertain just how much 
support or commercial interest is still under this market, leaving many to 
wonder where the tipping point is, and if prices will be able to move out of 
the current market range over the near future. Cash cattle is quiet, and 
expected to remain that way until sometime Thursday or Friday at this point 
unless something unexpected develops. A few bids are redeveloping in both the 
north and south on a live basis at $134 per cwt. Asking prices are around $138 
to $140 in the South and $215 and higher in the North. Beef cut-outs at midday 
are higher, $0.29 higher (select) and up $0.83 per cwt (choice) with light 
movement of 90 total loads reported (45 loads of choice cuts, 17 loads of 
select cuts, no loads of trimmings, 27 loads of ground beef).

   FEEDER CATTLE:

   Strong gains continue to hold at midday across the feeder cattle, although 
gains have been cut to nearly 1/3 of levels seen early in the session. The 
inability for hold buyers in the market through the complex has been seen 
through the last couple of trading sessions. A mixed close at the end of day 
Wednesday could bring more uncertainty and lack of support to the market, but 
the wide intraday price swings have created quite the momentum through the 
week. 

   LEAN HOGS:

   Hog futures turned lower in most contracts with moderate to strong pressure 
developing Wednesday morning as traders are concerned about a moderate pullback 
in deferred contracts. Front month February contracts are still holding onto 
narrow gains, but the rest of the complex is trading under pressure at midday 
with weakness in cash markets through the morning and the inability to move out 
of the recent sideways pattern has seemed to get most traders bored of hanging 
on for the time being. April futures are leading the complex lower with $1.15 
per cwt losses, although if traders limit the market pullback to this level, 
additional buyer interest could quickly step back into the market later in the 
week. Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price fell $1.37 per cwt to $60.73 per cwt with the range from 
$52.00 to $63.00 per cwt on 2,494 head reported sold. Cash prices are lower on 
the Iowa Minnesota Direct morning cash hog report. The weighted average price 
fell $2.07 per cwt to $60.93 per cwt with the range from $52.00 to $63.00 per 
cwt on 240 head reported sold. The National Pork Plant Report reported 250 
loads selling with prices down $0.34 per cwt. Lean hog index for 2/8 is at 
$64.89 up 0.27, with a projected two-day index of $65.29, up 0.40. 

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


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