DTN Midday Livestock Comments 07/26 11:43

Northern Feedlots Continue to Hold Out For More Money

Bids of $308 to $310 are offered in the North, but with Northern asking
prices firm at $312 to $314 no dressed sales have been reported just yet.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

Bids are offered in Nebraska at $308 to $310, but no dressed deals have been
reported just yet. Given that feedlot managers have waited this long to trade
cattle, it's likely they'll wait however long they need to get the higher money
they're after. December corn is down 8 3/4 cents per bushel and December
soybean meal is down $2.70. The Dow Jones Industrial Average is up 731.38
points.

LIVE CATTLE:

The live cattle complex has traded mostly mixed ahead of Friday's noon hour,
but as the market gets closer and closer to the day's midpoint, traders have
let all but the August live cattle contract turn higher. August live cattle are
down $0.15 at $188.72, October live cattle are up $0.05 at $188.65 and December
live cattle are up $0.32 at $189.22. It makes perfect sense why traders are
somewhat leery about advancing the futures complex any more as on Thursday they
moved the spot October contract to the highest price point its traded since
last October. But as traders continue to see the resilient attitude of feedlot
managers in the North hold out and "keep their cool" as they wait for packers
to up their bids, traders are excited at the prospect of Northern dressed
cattle trading higher. A few bids are currently on the table in Nebraska at
$308 to $310, but thus far no cattle have traded in the North. On Thursday live
sales were reported in the South at $190, which is $2.00 higher than last
week's weighted average. Packer interest should improve as the day trades on.

Boxed beef prices are higher: choice up $2.01 ($314.47) and select up $2.99
($298.10) with a movement of 47 loads (24.25 loads of choice, 3.99 loads of
select, 8.92 loads of trim and 9.72 loads of ground beef).

FEEDER CATTLE:

Even though the live cattle complex is mixed, the feeder cattle complex has
elected to keep with its fully higher trend as traders see the support in the
fed cash cattle market to be extremely supportive and as they continue to see
aggressive buyer demand in the countryside for feeders. August feeders are up
$1.00 at $259.62, September feeders are up $1.35 at $259.25 and October feeders
are up $1.12 at $258.20. Continuing to see the spot August contract trade above
the market's 40- and 100-day moving averages is a strong technical indicator of
trader buy-in and support.

LEAN HOGS:

With pork cutout values trading slightly higher at midday, the lean hog
complex has found enough support in Friday's market to keep prices trading
merely sideways. August lean hogs are down $0.05 at $93.72, October lean hogs
are up $0.45 at $78.25 and December lean hogs are up $0.27 at $70.22. It is
somewhat encouraging to see the futures complex trading sideways as traders
could have just as easily let the market drift fully lower ahead of the
weekend. Traders are patiently waiting to see what continues to develop with
the market fundamentally as seasonal pork demand has increased, but they
continue to question if the seasonal demand is enough support to justify higher
technical trade.

The projected CME Lean Hog Index is delayed from the source. Hog prices on
the Daily Direct Morning Hog Report average $82.13, ranging from $76.00 to
$85.00 on 1,045 head and a five-day rolling average of $83.66 Pork cutouts
total 175.33 loads with 158.25 loads of pork cuts and 17.08 loads of trim. Pork
cutout values: up $0.27, $106.22.

ShayLe Stewart can be reached shayle.stewart@dtn.com






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