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DTN Midday Livestock Comments          02/21 11:58

   Feeder Cattle Futures have Sparked Additional Buyer Support 

   Aggressive buyer activity has quickly developed through live cattle and 
feeder cattle markets with commercial traders building on support seen late 
last week. This may bring additional market support back to the complex through 
the rest of the week. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Cattle futures are leading the entire livestock market higher with 
triple-digit gains seen in both live cattle and feeder cattle markets. The lack 
of fundamental support at this point is not creating any major market shift, 
but could limit additional buyer support late in the day. Lean hog futures are 
mixed in light trade with very little movement developing in any area of the 
complex. Corn prices are steady to higher in light trade. March corn futures 
are 1/2 cent higher. Stock markets are higher in light trade. The Dow Jones is 
94 points higher while Nasdaq is up 15 points.

   LIVE CATTLE:

   Live cattle futures are holding moderate to strong gains Tuesday morning as 
traders returned to the market with slightly bullish expectations developing as 
they build on the support seen through the end of last week. With lackluster 
activity seen in beef values and cash markets undeveloped, most of the support 
is now based on the potential for commercial traders to continue to point 
toward technical support developing through the morning. Front-month February 
contracts are leading the market higher with a $1.35 per cwt rally, pushing 
prices over $119 per cwt once again. Cash cattle quickly developed through the 
morning with prices generally steady with last week price levels. The lion's 
share of trade is expected to be done for the week, with prices already 
established even on expected clean up trade that may develop. Prices in the 
South are $119 to $120 per cwt with most late trade seen at $120 per cwt. 
Dressed trade in the North is seen at $190 per cwt. It is still uncertain just 
how many cattle traded through the morning Friday, but the ability to draw 
trade early in the session and not drag it out through the rest of the day is 
impressive. Beef cut-outs at midday are higher, $0.06 higher (select) and up 
$0.81 per cwt (choice) with light movement of 66 total loads reported (30 loads 
of choice cuts, 14 loads of select cuts, 14 loads of trimmings, 9 loads of 
ground beef). 

   FEEDER CATTLE: 

   Triple-digit gains across the feeder cattle futures complex is leading the 
entire cattle complex higher through the morning. With no additional support 
developing through the entire cash cattle markets and little sense of direction 
seen from beef values, the potential to draw buyers back into the feeder cattle 
trade is helping to spark some additional longer-term market support through 
the nearby and deferred contracts. The potential for tighter supplies to be 
seen through the spring and summer months is allowing many traders to bounce 
off of short term support levels early in the week.     

   LEAN HOGS:

   Despite the initial surge in lean hog futures prices at opening bell, the 
overall tone of the market has settled into a narrow but mixed trading range 
with no incentive for traders to move one direction or the other at this point. 
Prices are hovering between 10 cents lower and 25 cents per cwt higher as 
traders remain uncertain as to the short-term direction in cash values even 
though underlying support remains firm at this point. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$1.95 at $72.00 per cwt with the range from $68.00 to $74.00 on 3,249 head 
reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash 
hog report. The weighted average price fell $1.26 at $72.95 per cwt with the 
range from $68.00 to $74.00 on 358 head reported sold. The National Pork Plant 
Report reported 209 loads selling with prices up $0.57 per cwt. Lean hog index 
for 2/17 is at $77.07 up $0.41 with a projected two-day index of $77.24 up 
$0.17. 

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


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