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Tuesday, September 30, 2014  
 
 
 
 
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DTN Midday Livestock Comments          09/30 11:51

   Live Cattle Futures Slip Lower in Late-Month Trade

   Following aggressive market surges over the last couple trading sessions, 
traders have slowly backed away from previous highs as they prepare for month 
and quarter end. Moderate to strong buying remains in lean hog futures complex, 
as traders remain focused on firming cash values.

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Firm buyer support remains rooted through the lean hog futures and feeder 
cattle contracts Tuesday midday. Traders continue to focus on firmness in cash 
hog prices and still tight feeder cattle numbers which is enticing additional 
market support at the end of the month. Live cattle futures are holding 
moderate losses as traders seem to be focusing on position squaring more than 
anything else late Tuesday. Corn futures are lower at midday. December corn 
futures are 2 cents per bushel lower. Stock markets are lower in light trade. 
The Dow Jones is 5 points lower while Nasdaq is down 6 points.

   LIVE CATTLE:

   Trade Tuesday in the cattle complex has been more focused on position 
adjustment rather than basing price shifts on fundamental market activity. 
Following the aggressive gains Monday which moved prices to new highs, traders 
appear to be willing to square positions at the end of both September and the 
third quarter of the year. Losses have remained moderate in light trade, which 
could help to redevelop additional market support over the next couple of 
trading sessions. Cash cattle activity remains undeveloped with bids still 
unavailable. Asking prices are also hard to come by, but the few that are seen 
are marked around $161 to $162 per cwt in the South and $250 and higher in the 
North. These asking prices may adjust as the week continues, but for now it's a 
good starting spot given very little additional direction in the market. Beef 
cut-outs at midday are mixed, $0.16 per cwt lower (select) and up $1.49 per cwt 
(choice) with active movement of 136 total loads reported (37 loads of choice 
cuts, 48 loads of select cuts, 32 load of trimmings, 19 loads of ground beef).

   FEEDER CATTLE:

   Early gains have been nearly cut in half at midday across the feeder cattle 
complex with traders focusing on the building pressure in live cattle futures 
and uncertainty of just how much buyer momentum remains in the tank through the 
end of the session. End-of-the-month and quarter position squaring is likely to 
continue within the next couple hours of trade. This could lead to additional 
price volatility and potential losses in deferred contracts by closing bell.   

   LEAN HOGS:

   Strong early gains have faded slightly leading up to midday as traders are 
focusing on the lack of additional aggressive moves in cash markets and general 
pressure in the live cattle complex. Front-month October futures are holding 
strong 70 cent gains, but this is well off of early session highs, and appears 
to be allowing some end-of-the-month pressure into the market before closing 
bell. The rest of the complex remains mostly higher, although gains have eroded 
through late morning which could allow to additional uncertainty in the 
complex. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price fell $1.95 per cwt to $102.27 per cwt with the range 
from $95.50 to $108.00 per cwt on 3,641 head reported sold. Cash prices are 
lower on the Iowa Minnesota Direct morning cash hog report. The weighted 
average price fell $1.87 per cwt to $106.55 per cwt with the range from $95.50 
to $108.00 per cwt on 551 head reported sold. The National Pork Plant Report is 
reported 161 loads selling as prices gaining $1.06 per cwt. Lean hog index for 
9/26 is at $108.30 up 0.66, with a projected two-day index of $108.96 up 0.66.

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


(SK)

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