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DTN Midday Livestock Comments          02/24 11:39

   Livestock Contracts Lean Boldly Into Wednesday Afternoon 

   Trudging confidently into the noon hour, the livestock contracts are trading 
fully higher. 

ShayLe Stewart
DTN Livestock Analyst


   Rolling closer and closer to the noon hour, the entire livestock complex has 
moved to trading higher; earlier in the day the cattle futures were skeptical 
while the lean hog market skipped higher. Cattle futures were pressured to 
trade lower earlier in the week, but with support from traders now ample, the 
markets have seen the encouragement needed to move higher. March corn is up 5 
1/2 cents per bushel and May soybean meal is up $1.10. The Dow Jones Industrial 
Average is up 297.79 points and NASDAQ is up 83.46 points.


   Live cattle futures have jumped on board with the rest of the livestock 
market and are now trading higher after closing lower through the earlier part 
of the week. April live cattle are up $1.40 at $122.60, June live cattle are up 
$0.70 at $119.82 and August live cattle are up $0.90 at $118.42. The higher 
futures come at a great time as it could help encourage packers in their cash 
cattle market bids. There's been a few bids develop in Nebraska at $113 and in 
Texas at $114, but thus far no feedlots have jumped on the offers. It's still 
early in the week for cash cattle trade to develop and feedlots aren't 
impressed whatsoever by initial packer bids. Asking prices in the South are 
marked at $116 and the North has yet to share their asking prices. Packer 
interest should develop more through the afternoon, but it's looking like the 
week's cash cattle trade won't develop until Thursday or most likely Friday.

   The Fed Cattle Exchange Auction on Wednesday listed a total of 1,199 head, 
of which 409 actually sold; 790 head were listed as unsold, as they did not 
meet the reserve prices, which ranged from $114 to $116. Opening prices ranged 
from $112 to $113.50, high bids ranged from $114 to $114.25. The state-by-state 
breakdown looks like this: Texas 1,071 total head, with 409 head sold at 
$114.25, 662 head unsold; Oklahoma 74 total head, all of which went unsold; 
Kansas 54 total head, all of which went unsold.

   Boxed beef prices are mixed: choice up $1.11 ($241.40) and select down $0.64 
($229.89) with a movement of 81 loads (54.48 loads of choice, 5.54 loads of 
select, 10.32 loads of trim and 10.22 loads of ground beef).


   Early Wednesday morning it didn't look like feeder cattle contracts were 
going to draw the trader interest necessary to move higher, but as the market 
approached midmorning, the market had a change of heart and feeders are trading 
fully higher. March feeders are up $1.45 at $140.02, April feeders are up $1.75 
at $144.35 and May feeders are up $1.32 at $146.42. The corn market is having a 
modest rally, trading anywhere from 4 to 6 cents higher in the nearby 
contracts. Largely the aggressive buyer demand throughout the countryside this 
week for feeders has pushed the market and encouraged higher trade amid modest 
corn gains.


   Breaking out well ahead of Tuesday's gains, the lean hog contracts are 
showing no signs of weakness throughout Wednesday's trade and boldly continue 
to climb higher. April lean hogs are up $2.32 at $88.75, June lean hogs are up 
$1.32 at $94.95 and July lean hogs are up $1.15 at $94.67. There's a lot that 
can happen in the day between the morning cutout prices and afternoon cutout 
prices, but if the day can close with higher cutout values again, the market 
will most likely keep with its upward surge as there's phenomenal fundamental 
backing. Pinpointing when packers will feel confident in their committed 
supplies and back away from the market is still challenging, but at the time 
the market will start to see some fundamental weakness from the cash market and 
could begin to trade lower.

   The projected CME Lean Hog Index for 2/23/2021 is up $0.97 at $79.13, and 
the actual index for 2/22/2021 is up $0.42 at $78.16. Hog prices are sharply 
higher on the National Direct Morning Hog Report, up $4.60 with a weighted 
average of $74.06, ranging from $68.00 to $76.00 on 5,869 head and a five-day 
rolling average of $70.72. Pork cutouts total 211.90 loads with 181.40 loads of 
pork cuts and 30.50 loads of trim. Pork cutout values: up $2.56, $95.31.

   ShayLe Stewart can be reached

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