DTN Midday Livestock Comments          07/01 11:56

   Buyer Support Develops Wednesday

   As we enter July, traders looked for additional positive direction in all 
livestock trade with firm gains developing early Wednesday morning. Limited 
fundamental and technical direction is seen in the holiday-shortened trading 
week, but traders are looking for a sense of market stability.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Livestock futures have gained light to moderate buyer support, as traders 
shake off the pressure seen over the last couple of days with a new month and 
new quarter to focus on. The reality is there is very little new information 
available in the market and overall trade interest should be quiet this entire 
week due to the holiday. Each day there will likely be even less participation 
and market interest ahead of the holiday with futures markets closed Friday. 
Firm triple-digit gains have developed in both live and feeder cattle contracts 
Wednesday morning, but this is still unable to reverse the strong market 
weakness seen over the last week. Lean hog futures are mostly higher in limited 
but positive trade interest with narrow gains able to be sustained through most 
of the morning session. December corn is up 4 3/4 at $4.408 and December 
soybean meal is up $1.70 at $304.8.  The Dow Jones Industrial Average is up 
407.68 at 52,726.88.

LIVE CATTLE:

   Live cattle futures have firmed slightly at midweek, although the tone and 
activity of the entire cattle complex -- and especially the live cattle market 
-- seems cautious at best. Following the strong market move lower over the past 
couple of weeks, traders remain concerned about the ability to sustain beef 
values and product support through the last summer and fall months. At this 
point, the ability to move additional domestic product at higher price levels 
this year has gone well. But the underlying concern remains about the economy, 
whether consumers will start cutting budgets, and where the first and most 
drastic cuts will be seen. This is leading factor for the recent market 
volatility in both feeder cattle and live cattle futures over the past couple 
of months. Cash cattle markets remain generally undeveloped Wednesday morning. 
A few bids are now on the table in parts of eastern Nebraska, but asking prices 
remain very elusive; the rest of cattle country remains very quiet. Packer 
inquiry should continue to improve as the day progresses. It is expected that 
both sides will try to wrap things up before Friday and extend the holiday 
weekend. But for now, there is likely to be a wide gap to close before any 
significant trade can be agreed on. August live cattle are $0.25 higher at 
$242.675, October live cattle are $0.90 higher at $237.55, December live cattle 
are $0.88 higher at $237.25. Boxed beef prices are Lower: choice down $0.19 
($392.97) and select down $1.10 ($370.58) with a movement of 59.40 loads (39.78 
loads of choice, 6.49 loads of select, 6.31 loads of trim and 6.82 loads of 
ground beef).

FEEDER CATTLE:

   Feeder cattle futures are leading the cattle market and entire livestock 
complex higher Wednesday morning as traders are covering previous losses seen 
at the end of June. Although very little has changed fundamentally or 
technically in the market over the past couple of days, the fact that traders 
are working on a new month and quarter of books has in itself helped spark some 
buyer support back into the complex. All nearby contracts are holding gains of 
$2 per cwt or greater at midday. Without any additional significant shifts in 
outside market news, it is likely this support will hold, allowing traders to 
potentially carry the renewed interest into the end of the week. With markets 
closed Friday for the Fourth of July holiday, and overall trade interest 
subdued through the entire week due to holiday and vacation schedules, it is 
not surprising that overall market participation has been limited during the 
entire week. August feeders are $1.98 higher at $366.575, September feeders are 
$1.80 higher at $364.325 and October feeders are $1.78 higher at $361.425.

LEAN HOGS:

   Lean hog futures are mostly higher Wednesday morning, although limited 
interest and new market information as the session has continued is eroding a 
portion of early support. Mixed trade with light pressure in nearby contracts 
is being offset by light to moderate buying activity very slowly trickling into 
deferred contracts. Traders seem to be finding some underlying support at 
current price levels, although prices are still well below the 40-day moving 
average in all nearby contracts. The longer-term concern about expanded pork 
demand and the ability to open up increased export trade continues to be the 
biggest shadow hovering over the market heading into July. July lean hogs are 
$0.45 lower at $93.875, August lean hogs are $0.28 higher at $98.475 and 
October lean hogs are $0.53 higher at $82.525. Hog Prices are higher on the 
Daily Direct Morning Hog report, up $0.11 with a weighted average of $97.16, 
ranging from 94.00 to 98.00 on 4,125 head with a five-day rolling average of 
97.14. Pork cutouts totaled 149.81 loads with 120.83 loads of pork cuts and 
28.98 loads of trim. Pork cutout values are up $0.83 at $95.62.




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