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DTN Midday Livestock Comments          11/19 12:01

   Cattle Futures Slip on Feeder Cattle Pressure  

   Limited activity seen early in the session has allowed for some firm price 
pressure to develop during the lightly traded market session. Firm losses in 
feeder cattle trade has sparked some underlying pressure across deferred live 
cattle trade.

By Rick Kment
DTN Analyst

General Comments

   Firm follow-through buying activity is seen in lean hog futures trade 
following strong price support late last week. Cattle markets have backed away 
from early support as pressure in feeder cattle markets is leading the market 
lower. Corn markets are lower in light trade. December corn futures are 2 cents 
lower. Stock markets are lower in light trade. The Dow Jones is 379 points 
lower while Nasdaq is down 180 points.


   Mixed trade continues to be seen in live cattle trade Monday morning. The 
building pressure across feeder cattle trade has eroded buyer support in 
deferred contracts for the moment with losses of 2 to 77 cents per cwt 
scattered through summer and winter 2019 contracts. Firm gains continue to hold 
in nearby trade given the overall lack of active trade through the entire 
complex. This may add some additional market volatility through the next couple 
of days as limited trade interest is expected to move into the live cattle 
complex in front of the holiday break. Cash cattle interest remains undeveloped 
with show list distribution and inventory taking the main focus on Monday. It 
is expected that bids and asking prices will remain undeveloped through the 
rest of the day. Given the holiday-shortened week, there may be some additional 
interest moving into the complex sooner than later, with some token bids 
possible on Tuesday. Both sides would desire to wrap up cash trade before 
Thanksgiving in order to not reenter the market Friday, but it is yet to be 
determined if this can be accomplished. Boxed Beef cut-outs at midday are 
higher, $0.65 higher (select) and up $0.83 per cwt (choice) with light movement 
of 66 total loads reported (35 loads of choice cuts, 9 loads of select cuts, 8 
loads of trimmings, 14 loads of ground beef).


   Early price support in feeder cattle trade has slowly eroded with prices 
holding consistent losses of 30 to 50 cents per cwt. The overall lack of trade 
movement in the complex is adding to the overall weakness in the complex. This 
may add some additional late-day pressure as traders seem lethargic and may 
remain that way through the entire week.


   Moderate buyer activity is trickling into lean hog trade through late 
morning with February futures gaining the most support and also becoming the 
most actively traded session. Follow-through support is developing following 
the limit gains on Friday. Most contracts are 10 to 15 cents per cwt higher as 
very limited interest is seen through most contract months. This could limit 
additional direction later in the session, as prices seem content on recent 
market firmness, but unable to spark any aggressive renewed buyer activity. 
Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price is $0.36 lower at $51.24 per cwt with the range from 
$46.00 to $51.70 on 3,585 head reported sold. Cash prices are unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. The 
National Pork Plant Report posted 180 loads selling on the morning report. Pork 
carcass values added $1.43 per cwt at $69.61 per cwt. Lean hog index for 11/15 
is $59.10, down 0.76, with a projected two-day index of $58.51, down 0.59. 

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


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