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DTN Midday Livestock Comments          04/25 12:01

   Lean Hog Markets Expand Wide Gains Tuesday 

   Active buying continues to develop in lean hog trade as nearby contracts 
post gains near $2.50 per cwt in June and July contracts. This is allowing for 
aggressive market support to redevelop across the entire complex. Firm buyer 
support is holding in live cattle futures midday Tuesday, although buyer 
support remains moderate at best due to light volume. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Follow through gains have developed through the livestock market with lean 
hog trade leading the complex higher. This move higher in the hog market is 
causing the most surprise in the market with the potential for limit higher 
price moves in nearby contracts. Cattle markets are moderate at best, but the 
firmness in the market is a positive change following the sharp early week 
pressure seen Monday. Corn prices are higher in light trade. May corn futures 
are 6 cents higher. Stock markets are higher in light trade. The Dow Jones is 
236 points higher while Nasdaq is up 40 points.

   LIVE CATTLE:

   Firm buyer support is seen across live cattle futures with traders looking 
for additional buyer activity during the last couple hours Tuesday. Following 
sharp losses Monday, futures have regained market support and the potential to 
regain the momentum seen last week. Even though some uncertainty seems to be 
seen in boxed beef values over the last couple of days, there is still strong 
consumer support developing in the cattle market as traders are looking for 
traders to move back into both nearby and deferred contracts through the end of 
the month. Cash cattle markets remain inactive with bids and asking prices both 
undeveloped and poorly defined Tuesday morning. The expectation that most 
interest will be pushed into the second half of the week will likely move the 
emphasis to keep most packers on keeping bids from developing until Wednesday 
or later. At this point it is uncertain if feedlot managers are waiting to see 
if packers are willing to offer bids before establishing firm asking prices, or 
if they are focusing on the movement in the futures market before setting the 
asking price levels for the week. Beef cut-outs at midday are mixed, $2.13 
higher (select) and down $0.20 per cwt (choice) with light movement of 68 total 
loads reported (35 loads of choice cuts, 9 loads of select cuts, 15 loads of 
trimmings, 9 loads of ground beef). 

   FEEDER CATTLE: 

   Feeder cattle futures have turned mixed at midday after holding firm gains 
through the entire morning. The inability to draw additional buyer support at 
midday may create some underlying concerns not only late in the day, but 
through the rest of the week. May futures are the only contract holding losses 
at the current time with all other futures trading 50 to 90 cents higher. This 
may spark additional buyer support through the rest of the complex.  

   LEAN HOGS:

   Follow through buyer support has continued to quickly develop across all 
nearby lean hog futures as traders moved into the complex. The combination of 
higher cash hog trade in the morning report added to the increased support 
through the complex and is pushing nearby support to gains nearing $2 per cwt. 
The overall support may quickly not only pull prices off of support levels, but 
give commercial traders a springboard to move into the spring and summer 
markets which could build into additional market momentum. Cash prices are 
higher at midday on the National Direct morning cash hog report. The weighted 
average price added $0.27 at $53.72 per cwt with the range from $49.00 to 
$54.50 on 5,459 head reported sold. Cash prices are higher on the Iowa 
Minnesota Direct morning cash hog report. The weighted average price added 
$0.29 at $54.24 per cwt with the range from $49.00 to $54.50 on 2,920 head 
reported sold. The National Pork Plant Report reported 199 loads selling with 
prices fell $0.51 per cwt. Lean hog index for 4/21 is at $60.49 down $0.61 with 
a projected two-day index of $60.16 down $0.33. 

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


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