DTN Midday Livestock Comments          09/24 12:02

   Cattle Futures Weaken 

   Firm pressure in cattle trade is setting the tone as traders continue to 
trade the cattle on feed data through the day Monday. This is expected to leave 
cattle futures weak through the end of the session.

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Cattle futures are under firm pressure as follow-through losses are seen 
during the entire morning. This increased cattle placements and larger on feed 
number than what was expected is causing widespread weakness. Corn markets are 
higher in light trade. September corn futures are 2 cents higher. Stock markets 
are lower in light trade. The Dow Jones is 176 points lower while Nasdaq is 
down 12 points.

   LIVE CATTLE:

   Strong pressure has been seen Monday morning through the live cattle 
complex. Very little long-term direction is seen through the morning, although 
traders seem to be still adjusting to Friday's cattle on feed report. It is 
uncertain just how much of this market reaction will be confirmed as additional 
trade volume moves into the market over the next couple of days. It is expected 
that additional market volatility may develop over the coming days. Cash cattle 
markets are silent Monday morning with show list distribution and inventory 
taking the main order of business. This may continue through the middle of the 
week, allowing for increased movement Thursday and Friday. Boxed Beef cut-outs 
at midday are lower, $0.76 lower (select) and down $1.45 per cwt (choice) with 
light movement of 42 total loads reported (25 loads of choice cuts, 9 loads of 
select cuts, 0 loads of trimmings, 7 loads of ground beef).

   FEEDER CATTLE:

   Strong triple-digit pressure is moving into the feeder cattle futures market 
early Monday. The firm gains from year-ago levels seen on the cattle on feed 
report when it comes to feedlot placements have pulled any sense of market 
support away from the complex. The placements on the September 1st report, is 
the largest number of placements seen since these current numbers have been 
recorded. The focus on lower grain prices is creating a push to put more cattle 
in feed yards earlier than what is typically seen. This may influence not only 
current levels, but shift percentages through the end of the year.    

   LEAN HOGS:

   Lean hog futures are mixed in a narrow range with very limited activity seen 
through the entire complex. The limited movement in cash and futures trade is 
likely to leave prices hovering within a very narrow range through the rest of 
the session. Narrow losses in nearby contracts have been influenced by the 
pressure in the cattle complex. The focus on firming support in deferred trade 
is helping to spark some additional, but light buyer interest. Cash prices are 
unreported due to confidentiality on the National Direct morning cash hog 
report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota 
Direct morning cash hog report. The National Pork Plant Report posted 122 loads 
selling on the morning report. Pork carcass values added $0.78 per cwt at 
$79.96 per cwt. Lean hog index for 9/20 is at $59.09 up 1.65 with a projected 
two-day index of 60.85, up 1.76.

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


(SK)

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