DTN Midday Livestock Comments          08/02 11:41

   Optimism Greets Week 

   Livestock contracts are optimistic so far through Monday's trade and, if 
both pork cutouts and boxed beef prices can close higher, the optimism may 
stick around. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   After closing in a dismal manner Friday afternoon, the livestock contracts 
are back to the workplace ready to take on the new week. The lean hog market is 
making the biggest advancements with the board fully supporting their upward 
surge; now the market just needs to see a strong pork cutout close for packers 
to support the cash hog market come Tuesday and Wednesday. December corn is up 
9 1/2 cents per bushel and December soybean meal is up $4.80. The Dow Jones 
Industrial Average is down 9.19 points and NASDAQ is up 47.38 points.

   LIVE CATTLE:

   Live cattle futures are jumping into the new week with cautious optimism. 
August live cattle are up $0.12 at $122.20, October live cattle are up $0.05 at 
$127.25 and December live cattle are up $0.20 at $132.85. After last week's 
night-and-day type differences (packers relishing the fact that boxed beef 
prices were higher while feedlots only saw 77,000 head trade at mostly steady 
prices) cattlemen and feedlot managers alike wonder how to capture some of this 
pre-Labor Day excitement before it's come and gone. Technically speaking the 
market has some upward potential as the market's nearest resistance looms at 
$123.25. But moving the market above that point will take quite a bit of gusto. 
But with that being said, higher boxed beef prices and continued, unwavering 
consumer demand is a hard force to reckon with and feedlots plan to use that to 
their advantage, if they are given the opportunity. Showlists this week are 
somewhat lower in Kansas, lower in Texas but higher in Nebraska/Colorado.

   Last week's negotiated cash cattle trade totaled 77,209 head. Of that 72% 
(55,340 head) were purchased for the nearby delivery, while the remaining 28% 
(21,869 head) were purchased for the following 15- to 30-day delivery.

   Boxed beef prices are higher: Choice up $0.35 ($278.81) and select up $2.77 
($261.96) with a movement of 54 loads (22.67 loads of choice, 7.44 loads of 
select, 8.19 loads of trim and 15.41 loads of ground beef).

   FEEDER CATTLE:

   This week is going to be a big one for the feeder cattle market as Superior 
Livestock Auction hosts their Video Royale sale in Winnemucca, Nevada, where 
they are already working their way through selling roughly 184,000 head. With 
many Western cow-calf producers being pushed to sell their calves earlier than 
usual, a lot of producers have struggled to comfortably understand when they 
should market their calves. This week's massive sale will help producers 
understand what their calves are worth given the market's current state (fat 
cattle prices, board's trajectory, and corn prices). August feeders are up 
$0.37 at $158.55, September feeders are up $0.60 at $162.40 and October feeders 
are up $0.72 at $164.77.

   LEAN HOGS:

   Lean hog futures may have closed doggishly Friday afternoon, but the market 
is back to trading vibrantly come Monday. August lean hogs are up $1.12 at 
$107.32, October lean hogs are up $1.65 at $89.67 and December lean hogs are up 
$1.50 at $83.15. Packers haven't shown robust interest in the cash hog market 
yet this week, but that's not unusual given how they've recently been waiting 
until Tuesday or Wednesday to do the majority of their buying for the week. 
Most important will be how the day's pork cutout value closes. If higher prices 
are attainable, then packers may be even more eager than expected and want to 
secure supplies ahead of Labor Day. But if prices droop lower, they may be 
hesitant.

   Hog prices are lower on the National Direct Morning Hog Report, down $0.66 
with a weighted average price of $100.99, ranging from $100.00 to $102.00 on 
3,108 head and a five-day rolling average of $102.99. Pork cutouts total 120.81 
loads with 110.42 loads of pork cuts and 10.39 loads of trim. Pork cutout 
values: up $2.60, $126.49.

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




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