DTN Midday Livestock Comments          06/27 11:40

   Cattle Futures Rally Friday Morning

   Following early week pressure in cattle trade, buyers are quickly moving 
back into the market Friday morning as triple-digit gains are seen in live 
cattle and feeder cattle markets. Hog futures are mixed following Thursday's 
Hogs and Pigs report.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Livestock futures have regained momentum Friday morning, with active gains 
seen in all cattle markets. Nearby live cattle futures are holding gains of $2 
to $2.77 per cwt, while feeder cattle buying is leading the charge higher with 
gains of $3 per cwt in nearby trade months. The early week pressure has left 
markets generally unsettled and unable to find additional commercial or 
noncommercial buyer support. But the ability to move prices off of midweek lows 
has sparked renewed trade optimism. Hog futures are mixed in generally sluggish 
trade activity following Thursday's quarterly hogs and pigs report. Production 
numbers and breeding stock totals were nearly unchanged from a year ago, but 
the fact that overall hog numbers did not decrease is causing limited softness 
in a few nearby lean hog contracts Friday morning. July corn is up 5 3/4 at 
$4.153 and July soybean meal is up $0.70 at $271.6. The Dow Jones Industrial 
Average is up 544.25 at 43,931.09.

LIVE CATTLE:

   Live cattle futures have followed the feeder cattle market higher, posting 
the first active gain in the complex in over a week. August futures are leading 
the shift higher, as traders continue to focus on moderate to strong support 
still holding in wholesale beef prices. Triple-digit gains are seen through the 
entire complex as traders have found renewed support at $209 per cwt in August 
futures contracts. This underlying support through the entire market at the end 
of the week could help to solidify follow-through buying early next week. 
Although volume next week is still questionable, with the end of the month, and 
quarter seen early in the week, and markets closed at the end of the week due 
to the Independence Day holiday break.

   Cash cattle trade still remains generally sluggish, with light trade being 
reported in parts of the North at $368, dressed, steady with yesterday's 
business but $9 lower than last week's weighted average basis Nebraska. The 
South remains rather quiet following yesterday's live sales at $224 to $225, $4 
to $5 lower than the prior week's weighted averages. Some asking prices remain 
firm around $225-plus in the South and $370-plus in the North. Following up on 
yesterday's news, Teamsters Local 577 members at Tyson Foods in Amarillo, 
Texas, reported this morning that they have decided to strike. This facility 
has a daily slaughter capacity of around 5,500 head. June live cattle are $3.00 
higher at $224.7, August live cattle are $2.98 higher at $212.175 and October 
live cattle are $2.65 higher at $209.00. Boxed beef prices are Higher: choice 
up $1.14 ($396.19) and select up $2.52 ($382.26) with a movement of 60.61 loads 
(34.21 loads of choice, 8.39 loads of select, 10.64 loads of trim and 7.37 
loads of ground beef).

FEEDER CATTLE:

   Feeder cattle have rallied higher Friday morning, with active triple-digit 
gains seen in all nearby contracts. August futures are leading the complex 
higher, with prices moving well above $305 per cwt during morning trade. The 
ability to string together three positive market gains earlier this week 
following strong pressure the previous week has helped to create stability 
through the feeder cattle market and allowed traders to use previous price 
levels as support levels. If morning gains continue to hold through the end of 
the trading session, this will account to a weekly gain of $4.25 per cwt in 
front-month futures. Although this is still well below recent highs, the feeder 
cattle complex could potentially spend the next few weeks hovering within the 
current market range. Strong beef demand continues to be seen through the 
summer months, with active buyer support in feeder cattle buying likely to 
continue in the near future. August feeders are $3.35 higher at $306.65, 
September feeders are $3.25 higher at $306.625 and October feeders are $3.05 
higher at $304.475.

LEAN HOGS:

   Lean hog futures are mixed in lackluster trade Friday morning. Summer 
contracts are posting light to moderate gains Friday morning on strong 
financial market moves and indications that positive gains are seen in trade 
talks with China. October through April contracts are holding light losses as 
follow-through pressure after the hogs and pigs report Thursday is limiting 
buyer interest. Traders continue to be slightly disappointed that overall hog 
numbers have not eased. However, many of the adjustments seen Friday seem to be 
focused on backing away from pre-report positions rather than any major shift 
in market direction following the report. Nearby gains are supported based on 
strong continued demand, while long-term supply levels may continue to limit 
price support through the winter months. July lean hogs are $0.65 higher at 
$112.975, August lean hogs are $0.08 higher at $110.325 and October lean hog 
prices are lower on the Daily Direct Morning Hog report, down $0.24 with a 
weighted average of $107.85, ranging from $106.00 to $110.00 on 498 head with a 
five-day rolling average of $110.77. Pork Cutouts totaled 190.88 loads, with 
174.24 loads of pork cuts and 16.64 loads of trim. Pork cutout values are up 
$4.65 at $123.76. n hogs are $0.50 lower at $94.375.




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