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DTN Midday Livestock Comments          12/08 12:04

   Pressure Redevelops in Feeder Cattle Trade 

   Despite firmness seen in early morning activity and sluggish moves in live 
cattle and hog futures, the feeder cattle market has returned to firm losses as 
traders focus on potential market weakness in the coming days.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Follow-through pressure has developed in feeder cattle markets Friday 
morning as the complex still carries a weak undertone. This may spark 
additional uncertainty through the rest of the week, and into next week. Mixed 
trade in the rest of the complex is limiting overall market direction at the 
end of the week. Corn prices are higher in light trade. March corn futures are 
1 cent per bushel higher. Stock markets are higher in light trade. The Dow 
Jones is 94 points higher while Nasdaq is up 42 points.

   LIVE CATTLE:

   Live cattle futures remain mixed in a moderate trading range in most 
contract months. Firming support in front month December contracts is setting 
the tone for any support left in the market at the end of the week. The focus 
on additional pressure in deferred contracts and softness in feeder cattle 
trade is driving additional pressure to the market. Cash cattle markets appear 
to be done for the week with bids undeveloped Friday following the light to 
moderate trade that trickled into the market over the last three days. With 
prices falling $3 to $4 per cwt from last week, both sides appear to be good 
with the idea of waiting until next week before revisiting the cash cattle 
market. A few clean-up deals may develop, but that is becoming more unlikely as 
it gets later in the day. Beef cut-outs at midday are higher, $1.92 higher 
(select) and up $0.47 per cwt (choice) with active movement of 126 total loads 
reported (60 loads of choice cuts, 12 loads of select cuts, 27 loads of 
trimmings, 27 loads of ground beef). 

   FEEDER CATTLE:

   Follow-through pressure has developed across feeder cattle markets midday 
Friday despite the attempt to spark additional buyer support early in the 
session. The general lack of trade activity and concern that most buyers will 
not become aggressive over the near future led prices 60 to 80 cents per cwt 
lower at midday. This may bring about additional late-day liquidation even 
though trade volume remains sluggish. 

   LEAN HOGS:

   Mixed trade has developed Friday in a narrow to moderate range at midday 
following the overall lack of consistency in both fundamentals and outside 
markets over the last couple of days. Even though recent pressure has developed 
in futures trade through the week, there is growing support in pork values with 
strong triple digit support seen in the morning report. This is leaving futures 
trade very directionless with nearby contracts trading in a mixed range from 20 
cents lower to 30 cents higher. Choppy and inconsistent trade direction is 
likely to be seen through the end of the session. Cash prices are lower on the 
National Direct morning cash hog report. The weighted average price is down 
$0.14 at $59.06 per cwt with the range from $53.00 to $60.00 on 2,405 head 
reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash 
hog report. The weighted average price fell $0.58 at $58.92 per cwt with the 
range from $53.00 to $60.00 on 379 head reported sold. The National Pork Plant 
Report posted 153 loads selling with carcass values gaining $1.38 per cwt. Lean 
hog index for 12/06 is at $65.30 up $0.45 with a projected two-day index of 
$65.48, up $0.18.

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


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