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DTN Midday Livestock Comments          11/28 11:36

   Livestock Futures Surge Higher

   Sharp gains flooded into all livestock trade Tuesday morning as traders 
react and offset early week losses. Triple-digit gains are seen in all nearby 
contracts with feeder cattle futures leading the upward shift.

Rick Kment
DTN Analyst


   With traders apparently fully back from the holiday break, buyers stepped 
back into the market with significant force as strong triple-digit gains are 
holding in all cattle trade and lean hog futures able to trade $1 to $2 per cwt 
higher in nearby contracts through much of Tuesday morning. The combination of 
losses last week and Monday in cattle and hog trade has moved price levels to 
or below support levels. This upward shift has stimulated many traders who have 
been waiting on the sidelines for buy signals to step back into the market. It 
is uncertain just how much additional buyer activity is still left to uncover 
as market direction remains unsettled at best. December corn is down 2 3/4 at 
$4.528 and January soybean meal is up $0.50 at $437.1. The Dow Jones Industrial 
Average is up 175.80 at 35,509.27.


   Following strong losses over the last several days, February live cattle 
futures prices started the morning at the lowest price since February. The 
inability for the cattle complex to hold the market rebound seen in late 
October is creating both fundamental and technical concerns to the entire 

   Tuesday morning buyer support flooded into all cattle trade with feeder 
cattle and live cattle futures holding strong triple-digit gains. The ability 
to retract some of the recent losses, which developed due in part to limited 
trade seems to be creating additional market momentum across the entire 
complex. February live cattle futures are holding a $4 per cwt rally at midday, 
although the market structure remains extremely weak and follow-through buying 
will be needed in order to confirm any change in market direction over the next 
couple of days.

   Cash cattle activity remains quiet with bids and asking prices still 
unavailable at this point. The wild market swings over the past two days in 
futures trade could cause both sides to go back to the drawing board. Even 
though limited interest was seen Monday, mandatory reporting reported light 
trade in several areas $2 per cwt lower than last week's average. The wild 
swings in futures prices could create significant cash market shifts, and very 
easily delay trade activity until the last half of the week. December live 
cattle are $3.55 higher at $172.325, February live cattle are $4.50 higher at 
$173.325, April live cattle are $4.50 higher at $175.175. Boxed beef prices are 
lower: choice down $0.35 ($296.90) and select down $0.08 ($267.72) with a 
movement of 87.59 loads (47.79 loads of choice, 23.45 loads of select, 3.87 
loads of trim and 12.48 loads of ground beef).


   Sharp gains flooded the feeder cattle markets Tuesday morning as traders 
retracted Monday's losses. Spot January futures are trading over $7 per cwt 
higher during morning trade as the wide market shifts has created increased 
market volatility. Even with these strong gains, most of last week's losses are 
still holding, creating a negative overall impact on the entire complex.

   Current prices are holding above contract lows in the January futures, but 
following recent pressure are still significantly oversold with traders looking 
for additional hints of fundamental and technical support to move back into the 
market. The concern with the wide market swings is that the volatility can 
easily lead to additional volatility and wide market shifts. The ability to 
string together several days of upward price shifts would add significant 
confidence to the entire complex.

   January feeders are $7.23 higher at $220.025, March feeders are $6.38 higher 
at $222.675 and April feeders are $6.23 higher at $226.45.


   Lean hog futures have moved higher Tuesday morning following residual buying 
support spilling over from the cattle complex. But with lean hog futures still 
fundamentally and technically weak following active pressure over the last 
couple of weeks, this buyer support seems to be fading at midday. Although 
prices remain higher in all contracts, initial early gains have been cut 
significantly in most contract months. There remains uncertainty about the 
ability to spark additional volume in the market in order to stabilize the 
complex and rebuild on recent market pressure. Increased volume in cash hog 
trade and pork cutout values later in the week could help to bring some of the 
stability needed to the entire lean hog complex.

   December lean hogs are $0.85 higher at $68.725, February lean hogs are $1.08 
higher at $68.00. and April lean hogs are $0.50 higher at $74.125.

   Hog Prices are lower on the Daily Direct Morning Hog report, down $1.52 with 
a weighted average of $59.4, ranging from $54.50 to $62.00 on 3,515 head with a 
five-day rolling average of $59.91. Pork Cutouts totaled 203.76 loads with 
184.64 loads of pork cuts and 19.12 loads of trim. Pork cutout values are up 
$5.59 at $88.74.

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