DTN Midday Livestock Comments          02/04 11:15

   With Fundamental Support, Livestock Contracts Scale Higher 

   With fundamentals lending the futures complex all the support it could need, 
the entire livestock is trading higher into Wednesday's noon hour. 

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   It's been another prosperous morning for the livestock complex as all three 
of the markets are trading fully higher into Wednesday's noon hour. Still no 
cash cattle trade has developed, but it's assumed prices will be higher again 
this week as the board's been incredibly supportive and market's fundamentals 
point to higher prices as market-ready supplies of cattle are thin. March corn 
is up 1 1/4 cents per bushel and March soybean meal is up $6.80. The Dow Jones 
Industrial Average is up 311.56 points and NASDAQ is down 269.60 points.

LIVE CATTLE:

   The live cattle complex continues to rally aggressively into Wednesday's 
noon hour as the market is robustly supported by strong fundamentals. Aside 
from last week's bullish Cattle Inventory report, and the rally seen in last 
week's fed cash cattle market, the market knows market-ready supplies of cattle 
are thin right now and fed cash cattle prices are likely to continue to scale 
higher through at the least the first quarter of the year. The rekindled flame 
of the market's strong fundamentals has helped drive a notable rally in the 
futures complex too. February live cattle are up $0.47 at $240.82, April live 
cattle are up $1.12 at $242.70 and June live cattle are up $1.35 at $237.97. 
Still no cash cattle trade has developed and it's most likely business will be 
delayed until Thursday or Friday. Both bids and asking prices remain elusive at 
this point.

   Boxed beef prices are lower: choice down $0.57 ($370.14) and select down 
$0.52 ($366.71) with a movement of 58 loads (36.60 loads of choice, 3.81 loads 
of select, 10.18 loads of trim and 7.11 loads of ground beef).

FEEDER CATTLE:

   The feeder cattle complex is again charging higher into the day's noon hour 
as the market is feeling well supported by the industry's strong fundamentals 
and is also comforted to see the live cattle contracts trading higher as well. 
March feeders are up $2.57 at $370.50, April feeders are up $2.20 at $368.07 
and May feeders are up $1.77 at $364.00. So long as the live cattle contracts 
continue to scale higher through the  afternoon, it's likely feeder cattle 
contracts will do so as well.

LEAN HOGS:

   It's a full-fledged break-out day for the lean hog complex as the spot April 
contract scales to new contract highs as demand has been plentiful and the 
market isn't fearful of grinding higher. April lean hogs are up $1.45 at 
$99.60, June lean hogs are up $0.95 at $111.82 and July lean hogs are up $0.67 
at $112.50. Even though midday pork cutout values are a tick lower, the market 
seems to be finding comfort in demand which has been strong in recent trading 
days.

   The projected CME Lean Hog Index is delayed from the source. Hog prices are 
higher on the Daily Direct Morning Hog Report, up $0.02 with a weighted average 
price of $86.29, ranging from $82.00 to $88.00 on 2,480 head and a five-day 
rolling average of $85.49. Pork cutouts total 179.51 loads with 159.35 loads of 
pork cuts and 20.16 loads of trim. Pork cutout values: down $3.84, $93.53.

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




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