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DTN Midday Livestock Comments          06/17 12:16

   Buying Develops Midday Monday 

   Moderate to firm support moved into livestock trade Monday morning following 
aggressive initial pressure. The inability to spark further market liquidation 
has quickly changed the tone of the market, pushing prices higher midday Monday.

By Rick Kment
DTN Analyst

General Comments

   Initial market pressure seen early Monday was quickly offset by active 
buying. This quickly posted triple-digit gains in live cattle and lean hog 
futures as buyers move into the complex early in the week. The inability to 
expand last week's losses in lean hog trade could help to bring longer-term 
stability to the entire complex. Corn futures are higher in moderate trade. 
July corn futures are 2 cents higher. Stock markets are higher in light trade. 
Dow Jones is 52 points higher with NASDAQ up 59 points. 


   Strong triple-digit gains have quickly and aggressively moved into live 
cattle trade through the morning. This is breaking away from the light to 
moderate pressure late last week, and confirming the sideways trading range 
seen during most of June. The potential to bring additional commercial support 
to the table in the next couple of days may spark long-term buyer support, 
although the amount of cattle on feed and expected stable demand may limit 
upward market potential during summer months. Cash cattle markets are quiet 
with show list distribution and inventory taking being done. Given the fact 
that active trade never developed last week, showlists are expected higher in 
most areas, while short-bought packers may need to buy cattle sooner than later 
this week. Boxed Beef cut-outs at midday are mixed, $0.37 lower (select) and up 
$0.42 per cwt (choice) with moderate movement of 49 total loads reported (23 
loads of choice cuts, 18 loads of select cuts, 3 loads of trimmings, 5 loads of 
ground beef).


   Mixed trade is seen early Monday following strong initial pressure. The 
surge higher in live cattle futures and pullback in corn prices from morning 
highs has allowed for increased buyer support to slowly trickle into nearby 
contracts. Narrow trading ranges are expected through the end of the session as 
buyer confidence remains generally weak given the uncertainty of feed supplies 
over the next year.


   Strong underlying support is moving into the lean hog complex midday Monday 
following the limited attempts for further liquidation. Given the already soft 
market structure and technical pressure that developed last week, buyers moved 
into the oversold market complex, sparking additional long-term support through 
the entire complex. This may add even more underlying support through the week 
as traders continue to establish a market range over the next several weeks. 
Most of the buyer support is seen in nearby contracts, based on potential 
demand support for current production, not long-term supply issues which have 
weakened the entire hog complex during early June. Cash prices are lower on the 
National Direct morning cash hog report. The weighted average price is down 
$1.01 at $74.70 per cwt with the range from $67 to $76 on 4,815 head reported 
sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota 
Direct morning cash hog report. Pork values slipped lower in limited volume. 
Pork cutouts fell $0.43 per cwt at $82.78 per cwt with 141 loads traded. Lean 
hog index for 6/13 is $79.46, down 0.11, with a projected two-day index is 
$79.27, down 0.16.

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


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