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DTN Midday Livestock Comments          12/02 12:10

   Cattle Futures Implode at Midday

   Live and feeder futures are sharply lower near the top of the noon hour, 
unexpectedly hammered by aggressive long liquidation and technical-selling. For 
the most part, lean hog contacts are mixed with spot Dec and the far deferreds 
higher while Feb through August trade moderately lower.

By John Harrington
DTN Livestock Analyst

GENERAL COMMENTS: 

   With the board slumping badly to the south, potential for further feedlot 
sales this week seems to have come to a screeching halt. At least, we've picked 
up no bids nor indications that bullish-minded feedlot markets are prepared to 
accept less money than was available on Wednesday. The country business is 
probably done for the week. According to the midday report, the national hog 
base is $0.65 higher compared with the Prior Day settlement ($42.50-$48.50, 
weighted average $47.01). The corn market is several cents higher just before 
the noon hour, supported by commercial buying and improving ethanol margins. 
Equities are mixed near midday as traders sort through the jobs report and 
consider the possible implications of the pending Italian referendum. The Dow 
is currently 29 points lower with the Nasdaq better by 8.

   LIVE CATTLE: 

   In an unexpected spasm of weakness, live futures continue to turn a blind 
eye toward higher feedlot sales and work significantly lower just before the 
weekend break. Trade talk wants to blame demand worries, especially once 
wholesale biz stretches beyond mid-month. Prices are currently 102 to 245 lower 
with deferreds holding up a little better than the front end. Besides the large 
premium of recent country sales, spot December should find technical support 
above its 100-day moving average at $107.50. Beef cut-outs are mixed at midday, 
up $0.66 (select, $173.59) to off $0.22 (choice, $190.29) with light box 
movement (17 loads of choice cuts, 10 loads of select cuts, 5 loads of 
trimmings, 14 loads of coarse grinds). 

   FEEDER CATTLE: 

   Feeders have fallen in the same defensive mode as their live counters with 
prices as much as 292 to 325 lower at midday. Spot January has fallen below its 
100-day moving average at $125.50. If we close down here, technical bears will 
be frowning. On the other hand, it would put the lead contract nearly 500 
points below the cash index, a discount that seems excessively given recent 
psychology.

   LEAN HOGS: 

   Lean hog futures are mixed near the top of the noon hour with prices ranging 
from 80 higher to 40 lower. Spot December is receiving the best support from 
buyers thanks to this week's consistent appreciation of country sales. The 
carcass value closed lower with lower loin, picnic and ham cuts overshadowing 
better demand for butts, ribs and bellies. Pork cut-out: $74.03, off $0.29. CME 
cash lean index for 11/30: $48.80, up $0.58 (DTN Projected lean index for 
12/01: $49.52, up $0.72). 

   John A. Harrington can be reached at john.harrington@dtn.com 


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