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DTN Midday Livestock Comments          05/05 12:01

   Aggressive Gains Sweep Through Cattle Futures Thursday 

   Strong triple-digit gains have quickly developed in the cattle complex 
Thursday morning. This has led to additional buyer support through the entire 
complex, allowing follow through support to step back into the market. Hog 
futures remain firmly higher as traders step back from midweek losses based on 
fundamental support. 

By Rick Kment
DTN Analyst


   Sharp triple-digit gains have quickly developed in nearby and deferred live 
and feeder cattle futures with traders focusing on the follow through technical 
support that is developing in the feeder cattle market following the pullback 
in the complex during late April. Corn prices are lower. May corn futures are 3 
cents lower. Stock markets are higher in light trade. The Dow Jones is 39 
points higher while Nasdaq is up 8 points.


   Sharp late-day gains have developed in live cattle futures despite very 
little interest seen in fundamental market shifts at the end of the week. Front 
month June futures have posted a $2.30 per cwt rally. This support is primarily 
based on the late and aggressive move in the feeder cattle market which is 
nearing $3 per cwt. It is uncertain if current buyer interest will hold through 
closing bell, but triple-digit gains continue to hold through February 
contracts. Cash cattle markets are generally quiet with bids redeveloping at 
$190 to $191 per cwt in the North and $118 in the South Asking prices are still 
only seen in the South around $127 to $128 although most trade activity is 
expected to be pushed off until Friday. Beef cut-outs at midday are higher, 
$0.01 higher (select) and up $0.79 per cwt (choice) with active movement of 92 
total loads reported (43 loads of choice cuts, 30 loads of select cuts, 6 loads 
of trimmings, 14 loads of ground beef).


   Moderate early gains have quickly sparked widespread gains through the 
feeder cattle futures. This has sparked triple-digit gains in all contracts, 
leading nearby contracts to $2.50 to $3 per gains based on weaker corn market 
prices and follow-through support through the entire cattle complex.     


   Strong gains seen early in the session have eased slightly at midday, 
although buyer support remains firm at midday. The ability to hold 40 to 60 
cent gains through the midday have allowed traders to focus on firm fundamental 
support and cover the midweek pressure seen in the futures complex. The overall 
tone of the market remains firm based on expected additional support developing 
later in the week, which may move additional commercial buyer activity back 
into the complex. Cash prices are lower on the National Direct morning cash hog 
report. The weighted average price fell $0.14 per cwt to $70.96 per cwt with 
the range from $66.00 to $73.00 per cwt on 4,287 head reported sold. Cash 
prices are unreported due to confidentiality on the Iowa Minnesota Direct 
morning cash hog report. The National Pork Plant Report reported 142 loads 
selling with prices down $0.03 per cwt. Lean hog index for 5/3 is at $72.64, up 
0.87 with a projected two-day index of $73.59, up 0.95.

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


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