DTN Midday Livestock Comments 09/03 11:57 Strong Corn Market Shift Supports Livestock Futures The sharp gain in corn futures Friday morning have created significant buying activity in the live cattle market at midday. Lean hog futures remain sharply higher as strong noncommercial support is returning to the market in front of the long holiday weekend. By Rick Kment DTN Livestock Analyst GENERAL COMMENTS: Livestock futures are higher at midday with strong non commercial support holding in the lean hog markets. Renewed buying support has developed midday in the live cattle markets as traders are taking into account the sharp gains in the corn market. Corn futures are sharply higher in active buying support. December corn futures are 15 1/2 cent higher at midday. Stock markets are higher in late week support. The Dow Jones is 84 points higher while Nasdaq is up 21 points. LIVE CATTLE: Early losses in the live cattle futures have faded with renewed support in developing at midday given the skyrocketing corn price. Early trade seemed to focus on the higher cost of production limiting buyer interest in the market, but with corn futures holding double-digit gains with even greater upward momentum possible, there is starting to be increased focus on the potential of lower beef production levels. This could tighten supplies through the next six months. Cash trade appears to be in the books for the week with talk of bids still floating around at $97 per cwt. This is likely to be viewed as throw away bids this late in the week in front of the long holiday weekend. Traded numbers in the South seem to be significantly lighter than what you would think is needed, but packers seem to be getting enough cattle for strong slaughter runs. Beef cut-outs at midday are mixed, falling 51 cents per cwt (select) and gaining 60 cents per cwt (choice) with light movement of 168 total loads reported (52 loads of choice cuts, 63 loads of select cuts, 17 loads of trimmings, 37 loads of coarse grinds). FEEDER CATTLE: The sharp rally in the corn market through morning trade is creating significant price shifts in the deferred contract. November and January feeder cattle futures are 92 cents lower at midday focusing on the lack of strong support in the live cattl market as well as the sharp increase in corn futures prices. September and October feeder cattle futures on the other hand are dead in the water with prices steady to 5 cents lower in sluggish trade. LEAN HOGS: Despite the softness in the cash hog market, renewed buying support is jumping into the lean hog futures Friday morning. October futures are posting a 77 cent gain at midday, pushing front month contracts above $77 per cwt. This could help to draw additional trade into the market in front of the long holiday weekend. Cash prices are lower at midday on a light run of 423 head. Prices fell 44 cents per cwt with a weighted average of $76.77. The trading range is $70.00 to $77.70 per cwt. Fresh pork trade reported 16 loads of fresh pork product sold on the midday carlot. Lean hog index for 9/1 is at $82.66 down 35 with a projected two-day index of $81.95 per cwt, down 71. PORK BELLIES: The 14-to-16-pound bellies are unreported on the midday carlot report. Rick Kment can be reached at rick.kment@telventdtn.com (SK) Copyright 2010 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
