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DTN Midday Livestock Comments          02/01 11:51

   Wednesday Brings Weaker Tones to All Livestock Contracts

   Heading into Wednesday's afternoon, the market is going to look for 
fundamental support as its technicals are enduring immense pressure.

ShayLe Stewart
DTN Livestock Analyst


   Despite seeing an extremely bullish Cattle Inventory report Tuesday 
afternoon, the entire livestock complex is trading lower into Wednesday's 
afternoon. March corn is down 3 1/4 cents per bushel and March soybean meal is 
down $3.10. The Dow Jones Industrial Average is down 352.96 points.


   I once had a market mentor tell me, "whenever people in the market all 
believe one thing is going to happen, the market will indeed do the opposite." 
After Tuesday's extremely bullish Cattle Inventory report came out, most 
believed that Wednesday's market would trade higher and that this could indeed 
be the rallying factor that the market needed. But come Wednesday morning, my 
mentor stood correct once again. February live cattle are down $0.42 at 
$158.42, April live cattle are down $0.87 at $162.15 and June live cattle are 
down $0.65 at $158.50. After running to new contract highs on Monday, it's 
somewhat understandable that the live cattle contracts aren't challenging that 
new high Wednesday. But more than anything, it seems as though traders are 
apprehensive and need time to absorb Tuesday's report, and will likely turn the 
markets higher later in time. The cash cattle market hasn't seen an ounce of 
interest and it's likely that this week's market won't trade until Thursday or 

   The Fed Cattle Exchange Auction held Wednesday reported 60 lots (all lots in 
TX), totaling 974 head of cattle, none of which sold. Opening prices were at 
$155, bids were at $155.50, but they did not meet reserve prices of $158.

   Boxed beef prices are lower: choice down $1.33 ($264.76) and select down 
$0.98 ($251.94) with a movement of 84 loads (57.08 loads of choice, 7.66 loads 
of select, 10.04 loads of trim and 8.84 loads of ground beef).


   The feeder cattle contracts are too trading lower despite the fact that 
nearby corn contracts are trading lower and that Tuesday's Cattle Inventory 
report was extremely bullish. March feeders are down $3.07 at $183.07, April 
feeders are down $2.45 at $187.60 and May feeders are down $1.90 at $192.07. 
The feeder cattle complex will continue to look at this week's cash cattle 
market and to the sales that develop in the countryside for support as it's 
evident that Wednesday's technicals aren't going to provide any support.


   The lean hog complex is continuing to run lower as the market endures 
immense technical pressure. February lean hogs are down $0.62 at $74.25, April 
lean hogs are down $2.90 at $83.50 and June lean hogs are down $2.07 at 
$100.97. Unfortunately, with all of the livestock contracts enduring this type 
of rigorously down pressure, it's likely that, regardless of whatever the 
market's fundamentals accomplish Wednesday afternoon, it won't be enough to 
offset the technical downturn.

   The projected lean hog index for Jan. 31 is down $0.07 at $72.51 and the 
actual index for Jan. 30 is down $0.13 at $72.58. Hog prices are unavailable 
due to packer submission issues. Pork cutouts total 167.05 loads with 144.77 
loads of pork cuts and 17.28 loads of trim. Pork cutout values: down $0.29, 

   ShayLe Stewart can be reached

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