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DTN Midday Livestock Comments          02/26 11:59

   Cattle Turn Higher, Forget Friday's Cattle on Feed 

   There was concern that the cattle complex could potentially be pressured 
early on this week as Friday's Cattle on Feed report was bearish. Thankfully, 
traders are looking past that report and continue to find support in the 
fundamentals of the market. 

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   Cattle contracts are continuing to trade higher as traders aren't too 
concerned with Friday's bearish Cattle on Feed report. The lean hog market is 
trading mixed but if pork demand remains strong, the market could turn fully 
higher. March corn is steady and May soybean meal is steady. The Dow Jones 
Industrial Average is up 28.27 points.

LIVE CATTLE:

   The live cattle market is trading fully higher into Monday's noon hour as 
the complex has elected to shake Friday's Cattle on Feed report and rather 
focus on the $3 to $4 gain seen last week in the cash market. April live cattle 
are up $0.67 at $188.57, June live cattle are up $0.22 at $184.10 and August 
live cattle are up $0.10 at $183.07. It's powerful to see that choice cuts are 
continuing to trade above $300 as that's been a price point the market has 
struggled to maintain. The increased price in boxed beef values could 
incentivize packers to run faster chain speeds, too. 

   Last week Southern live cattle traded at $183, $3 higher than last week's 
weighted average, while Northern dressed cattle traded for mostly $292, $4 
higher than last week's weighted average. Last week's negotiated cash cattle 
trade totaled 72,872 head. Of that, 90% (65,774 head) were committed to nearby 
delivery while the remaining 10% (7,098 head) were committed for deferred 
delivery.

   Boxed beef prices are higher: Choice up $1.45 ($302.06) and select up $1.81 
($288.12) with a movement of 48 loads (28.57 loads of choice, 4.38 loads of 
select, 8.67 loads of trim and 5.96 loads of ground beef).

FEEDER CATTLE:

   The feeder cattle complex started the day out slightly lower as traders 
noted the findings of Friday's Cattle on Feed report, but given the strong 
fundamental footing of the market, traders have elected to ignore the report's 
bearish take and move on. March feeders are down $0.42 at $254.15, April 
feeders are up $0.12 at $260.10 and May feeders are up $0.55 at $262.62. With 
the strength seen last week in the fat cattle market, feeders are expected to 
maintain these prices, if not trade even a little higher, as demand continues 
to be an unwavering force in this year's cattle complex.

LEAN HOGS:

   The lean hog complex is trading mixed as the market sees some pushback in 
its nearby contracts while most of the deferred months are trading slightly 
higher. April lean hogs are down $0.55 at $86.65, June lean hogs are up $0.55 
at $99.92 and July lean hogs are up $0.30 at 100.57. The most encouraging 
factor that's surfaced in Monday's trade is that pork cutout values are higher 
to start the week but that is stemming from a $18.99 jump in the belly, which 
could be an unreliable source given that the cut saw a lot of pressure just 
last week.

   The projected lean hog index for Feb. 23 is up $0.36 at $79.46, and the 
actual index for Feb. 22 is up $0.32 at $79.10. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $1.50 with a weighted average price of 
$70.09, ranging from $69 to $72 on 679 head and a five-day rolling average of 
$72.56. Pork cutouts total 171.09 loads with 154.24 loads of pork cuts and 
16.85 loads of trim. Pork cutout values: Up $2.32, $93.48.

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




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