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DTN Midday Livestock Comments          02/21 12:02

   Hog Futures Rally on Trade Hopes

   Buying quickly moved back into the lean hog complex with nearby futures $2 
to $2.70 per cwt higher through the morning. This is helping to spark movement 
back into the bearish complex.

By Rick Kment
DTN Analyst

General Comments

   Strong morning buying has flooded into hog trade as traders look at the 
report of potential ag exports to China once a trade deal is done. But there is 
no specific information available, allowing traders to speculate on future 
demand. This is posing $2 per cwt gains in all nearby contracts midday 
Thursday. Firm pressure is moving into cattle trade as traders square positions 
from early week gains. Corn futures are higher in sluggish trade. March corn 
futures are 6 cents higher. Stock markets are lower in light trade. Dow Jones 
is 71 points lower with Nasdaq down 11 points. 

   LIVE CATTLE:

   Live cattle trade is slowly slipping lower as traders moved back into the 
hog complex, allowing for some nearby contract liquidation by noncommercial 
traders through the morning. This is holding spring and summer trade 30 to 80 
cents lower although trade remains very limited. Cash markets have started to 
see increased packer involvement through the morning, although bids have done 
very little to improve as the week continues. Live bids are seen at $123 per 
cwt, while dressed bids of $198 per cwt. Asking prices are at $128 and higher 
live and $205 to $207 dressed. Active trade may still be pushed off until 
Friday with both sides not budging at this point. Boxed Beef cut-outs at midday 
are higher, $0.12 higher (select) and up $1.58 per cwt (choice) with light 
movement of 61 total loads reported (31 loads of choice cuts, 13 loads of 
select cuts, no loads of trimmings, 17 loads of ground beef).

   FEEDER CATTLE:

   Firm pressure has moved through all cattle trade Thursday morning with 
increased market uncertainty developing through the entire complex. Following 
early week support, traders are slowly but steadily backing away from previous 
market support. This may add to even more pressure late in the week. Nearby 
contracts are holding losses of $1 per cwt at midday, while limited softness 
seen in deferred contracts. 

   LEAN HOGS: 

   Buyer support is moving into the complex Thursday morning as reports that 
China will agree to purchase $30 million in ag products yearly. Although there 
is no indication as to what products will be involved and how much of each of 
these products, hog traders expect that pork will be a beneficiary of this 
deal. This has pushed nearby contracts $2 to $2.67 per cwt higher at midday. 
The previous pressure in the market has left the market ripe for a market 
rally, which could lead to additional support even if trade deals are not 
revealed. Cash prices are lower on the National Direct morning cash hog report. 
The weighted average price fell $1.34 at $46.56 per cwt with the range from 
$44.00 to $47.85 on 4,910 head reported sold. Cash prices unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork 
carcass values shifted higher following mixed primal values, with prices 
gaining $0.13 per cwt at $60.30 per cwt with 180 loads traded. Lean hog index 
for 2/19 is $54.13, down $0.30, with a projected two-day index is $54.06, down 
$0.07.

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


(CZ)

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