DTN Midday Livestock Comments          11/20 11:54

   Livestock Futures Rally Friday Morning

   Strong gains in the lean hog and feeder cattle markets Friday morning are 
helping to support the livestock complex. Trade is expected to remain light 
through the end of the session, but early gains are expected to hold.

By Rick Kment
DTN Livestock Analyst

GENERAL COMMENTS:

   Moderate to strong gains have been seen in the livestock complex through the 
morning with lean hog futures leading the upward charge. Front-month lean hog 
contracts are posting gains over $1 per cwt following a major sell-off 
Thursday. Live cattle futures continue to gain support from the elevated feeder 
cattle price at midday. Corn futures are slightly lower at midday as traders 
continue to be concerned about the heavy corn production numbers reported even 
though harvest progress is very slow. December corn futures are currently 
trading 2 cents lower. Stock markets are moderately lower as traders continue 
to add to Thursday's losses. The Dow Jones is currently 44 points lower, while 
the Nasdaq is down 17 points. 

LIVE CATTLE: 

   December contracts are currently holding onto moderate gains with prices 
just above the $84 level heading into the weekend. But other nearby and 
deferred contracts are trading in a narrow range from 5 to 12 cents higher. 
Overall, buying support seems stable at midday, but at this point, it is 
unlikely that additional upward movement will be seen before closing bell. Cash 
trade has been very quiet Friday morning, indicating that most of the activity 
may already be wrapped up for the week. Beef cut-outs at midday are mixed, up 5 
per cwt (select) and down 56 cents per cwt (choice) with moderate movement of 
303 total loads reported (129 loads of choice cuts, 99 loads of select cuts, 26 
loads of trimmings, 49 loads of coarse grinds). 

FEEDER CATTLE: 

   Moderate gains have stepped into the feeder cattle markets early Friday 
morning. Even though there are projections of slightly higher placements 
reported in the upcoming cattle-on-feed report, a portion of the trade seems to 
figure that these numbers have already been factored into the market, and may 
leave additional room for gains following the release of the numbers. Also, 
weakness in the corn market seems to have some feeder cattle traders slightly 
more aggressive.                 

LEAN HOGS: 

   Sharp gains have been seen in the lean hog futures market as traders react 
to the sharp losses Thursday. It seems that, overall, activity levels have been 
subdued through much of the week and that traders seem to be trading paper in 
front of the weekend. The wide trading ranges seem to breed more volatility in 
the market as the price pendulum swings back and forth. The challenge with 
these wide price movements is that, at the end of the cycle, not much has 
changed in long-term price movements. Cash prices were lower, falling 68 cents 
per cwt with a moderate run of 1,060 head reported. The weighted average price 
is $50.82 per cwt, with a range of $49.25 to $51.35 per cwt. Fresh pork trade 
was moderate with 22 loads moving according to the midday carlot. The CME cash 
lean index for 11/18 was 54.24 down 35, with the DTN two-day average lean hog 
index at 53.92 down 32.

PORK BELLIES: 

   Light buying has been seen in the belly futures market following the upward 
movement in the lean hog complex. Front-month contracts are currently posting a 
$1.07 per cwt, which may help to keep other nearby contracts elevated heading 
into the weekend. The 14- to 16-pound product reported two loads selling at $74 
per cwt on the midday carlot. 


(SK)

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