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DTN Midday Livestock Comments          09/19 11:58

   October Hog Futures Skyrocket Higher    

   Strong price rebounds are seen in front-month October lean hog futures. This 
significant shift from the previous day is creating widespread short-covering 
opportunities. Cattle futures remain mixed in light trade. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Strong gains have redeveloped in front-month lean hog futures with traders 
retracting losses seen Thursday. It is uncertain if these gains will hold 
through closing bell given the light trade volume through the entire complex. 
Cattle trade is mixed in live cattle futures with the focus on the upcoming 
cattle on feed report released Friday afternoon. Corn futures are lower at 
midday. December corn futures are 5 cents per bushel lower. Stock markets are 
mixed in light trade. The Dow Jones is 25 points higher while Nasdaq is down 24 
points.

   LIVE CATTLE:

   Mixed trade is seen through live cattle contracts midday Friday with narrow 
losses holding in October and December contacts. Moderate support is seen in 
February and April contracts through late morning, although most of traders 
focus continues to be based on the direction of cash cattle trade at the end of 
the week as well as potential shifts in cattle supplies reported on the cattle 
on feed report. Cash cattle activity remains sluggish with a few additional 
bids starting to develop in both the North and South. Bids of $155 can be had 
in the South, while dressed bids in the North are at $245 per cwt. It is likely 
that active trade could be delayed until after the cattle on feed report. 
Asking prices are seen at $162 to $164 in the South and $254 and higher in the 
North. Beef cut-outs at midday are lower, $1.45 per cwt lower (select) and down 
$0.34 per cwt (choice) with light movement of 81 total loads reported (35 loads 
of choice cuts, 21 loads of select cuts, eight loads of trimmings, 16 loads of 
ground beef).

   FEEDER CATTLE:

   Nearby contract months have been able to slowly but steadily gain momentum 
through morning trade. Traders are focusing on the potential of lighter than 
expected placements in August. This has pushed September through January 
futures over $1 per cwt higher in anticipation of a bullish report. Trade is 
likely to remain sluggish through the end of the session with light to moderate 
support seen in feeder cattle futures, but for the most part, traders are 
content holding these gains into the weekend break.  

   LEAN HOGS:

   The wild shifts that have been commonplace in the lean hog futures markets 
over the last few weeks have once again not disappointed market watchers. 
Through the day Thursday nearby futures traded at or near limit lows, all to 
reverse the trend and hold aggressive near limit highs through the morning 
Friday. October futures are trading $2.77 per cwt higher, which is creating 
some additional uncertainty and questioning any fundamental reasoning about 
longer term supply and demand. Beyond nearby contract gains, it has been hard 
to find much activity at all through the rest of the complex allowing current 
positions to hold into the weekend. Cash prices are lower on the National 
Direct morning cash hog report. The weighted average price fell $2.81 per cwt 
to $100.01 per cwt with the range from $98.00 to $104.00 per cwt on 1,565 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 127 loads selling as prices adding $0.31 per cwt. Lean hog index for 
9/17 is at $104.74 up 0.59, with a projected two-day index of $105.14 up 0.40.

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


(SK)

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