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DTN Midday Livestock Comments          06/25 11:55

   Hog Markets Rally 

   Triple-digit gains quickly move into lean hog trade as traders push prices 
off of 10-month lows. This is helping to rekindle a sense of market stability 
near $75 per cwt. Cattle futures remain mixed following choppy morning price 
swings.

By Rick Kment
DTN Analyst

General Comments

   Active buyer support moved into lean hog futures trade with triple-digit 
support holding at midday. Although prices have backed away from session highs 
in cattle and hog futures, traders are trying to rebuild market support at 
current price levels. Corn futures are higher in light trade. July corn futures 
are 2 3/4 cents higher. Stock markets are lower in light trade. Dow Jones is 48 
points lower with NASDAQ down 52 points. 

   LIVE CATTLE:

   Mixed trade is seen at midday following a failed attempt to spark strong 
renewed buyer support through the entire live cattle complex. June futures are 
leading the complex higher with a 37 cnet per cwt rally as traders continue to 
quickly exit June contracts as markets are nearing expiration. The rest of the 
complex is stuck in a narrowly mixed range of 10 cents lower to 5 cents higher 
as traders appear to be treading water at current price levels, given the 
extreme market pressure seen in all livestock trade over the last week. Cash 
cattle activity remains generally sluggish with a few bids developing through 
the morning. Live bids are seen at $107 per cwt, with dressed bids in the North 
at $174 to $175 per cwt. Asking prices are still undefined, and may remain that 
way through the end of the day. Trade is likely to be pushed to the last half 
of the week, although the potential for limited live trade in the South midweek 
could still be seen. Boxed Beef cut-outs at midday are lower, $0.52 lower 
(select) and down $0.36 per cwt (choice) with moderate movement of 95 total 
loads reported (55 loads of choice cuts, 24 loads of select cuts, 7 loads of 
trimmings, 9 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have bounced higher and lower in a narrow to moderate 
range Tuesday. The initial move higher focused on firming support in live 
cattle trade as well as short covering. But buyer interest seemed to quickly 
run out of steam, leaving prices to erode late morning, setting additional 
contact lows at midday. It is expected that trade volume will remain light 
through the end of the session, leaving prices hovering in light to moderate 
losses near closing bell.

   LEAN HOGS: 

   Following two days of aggressive losses, buyers stepped back into the 
complex, pushing prices higher Tuesday morning. Firm support has held through 
the morning, although midday prices have backed away from session highs due to 
general lack of market buyer support willing to move into the still weak market 
structure. Traders are cautiously focusing on the market rally Tuesday, making 
sure that there is longer term substance behind the move higher, and not just a 
one day rally based on short covering. Continued technical pressure still 
exists, while fundamentals have yet to show signs of support during late June. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price is down $1.59 at $71.92 per cwt with the range from $63 
to $75 on 5,276 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork 
values shifted lower once again as pork values continue to bounce higher and 
lower on a daily basis. Pork cutouts fell $0.50 per cwt at $76.83 per cwt with 
212 loads traded. Lean hog index for 6/21 is $78.65, down 0.49, with a 
projected two-day index is $78.31, down 0.34.

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


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