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DTN Midday Livestock Comments          08/10 11:57

   Livestock Futures March Higher Wednesday

   Livestock futures trading volume has been light so far on Wednesday, so the 
live cattle, feeder cattle and hog futures contracts have all stuck with the 
higher direction they took at the morning. September corn is up 13 1/4 cents 
per bushel and August soybean meal is up $13.90 per ton. The Dow Jones 
Industrial Average is up 481 points and NASDAQ is up 318 points.

Elaine Kub
Contributing Analyst

GENERAL COMMENTS:

   Livestock futures trading volume has been light so far on Wednesday, so the 
live cattle, feeder cattle and hog futures contracts have all stuck with the 
higher direction they took at the morning. September corn is up 13 1/4 cents 
per bushel and August soybean meal is up $13.90 per ton. The Dow Jones 
Industrial Average is up 481 points and NASDAQ is up 318 points.

LIVE CATTLE:

   Live cattle futures are displaying another very orderly step higher 
Wednesday morning, continuing the series of higher daily lows that display a 
clear upward trend on the daily chart. The August contract is up $1.05 at 
$139.025, the October contract is up $0.90 at $144.075, and the December 
contract is up $0.775 at $150.425. But this is the kind of simple pattern that 
is almost too simple, and traders should be expecting some kind of correction 
eventually, particularly if trading volume picks up during Wednesday afternoon. 
Things are quiet in the cash cattle trade, too, so far this week. Asking prices 
are around $138 to $140 on a live basis in the South, but still not fully 
established in the North. Wednesday's cattle slaughter is projected at 125,000 
head, which is even with week-ago numbers and 9,000 more than year-ago numbers.

   Boxed beef prices are lower: choice down $1.29 Wednesday morning ($263.44) 
and select down $0.88 ($236.82) with a strong movement of 72 total loads (41.54 
loads of choice, 24.18 loads of select, 0 loads of trim, and 6.37 loads of 
ground beef).

FEEDER CATTLE:

   Higher feeder cattle futures prices Wednesday have so far displayed a 
surprising imperviousness to the double-digit gains in corn futures, but some 
deferred contracts are starting to slip into the red as more of the day's 
trading volume accumulates. The August contract is up $1.20 at $180, the 
September contract is up $1.20 at $183.70, and the October contract is up $0.65 
at $186.225. The meteorologists are predicting another heatwave across the 
Plains and Western Corn Belt through the weekend, which, in addition to 
stressing the calves already in feedlots, will exacerbate the ongoing drought 
in regions where cow-calf operations have been trimming their herds all summer.

LEAN HOGS:

   Nearby hog futures are gaining value at an enthusiastic pace this week as 
the market evaluates a supply chain that is far from overcrowded with either 
pork or current hogs. Around midday, the August lean hog contract is up $0.10 
at $122.30, the October contract is up $0.80 at $100.40, and the December 
contract is up $0.05 at $89.65. Year-over-year inflation at the grocery store 
has priced various pork products anywhere from 4.8 percent higher (pork chops) 
to 18% higher (lunchmeats) since last July, according to the closely-watched 
CPI report released Wednesday morning. People have to eat, but demand does seem 
to be switching to the more economical meat products, like sausage and 
lunchmeats (and chicken, up 17.6%). Wednesday's hog slaughter is projected at 
470,000 head, which is 1,000 more than week-ago numbers but 4,000 fewer than a 
year ago.

   The CME Lean Hog Index from Aug. 8 was 122.25 (up $0.33). Pork cutouts 
Wednesday morning total 210.73 loads with 195.08 loads of pork cuts and 15.65 
loads of trim. Pork cutout values: down $0.05, to $123.80.

   Elaine Kub, CFA is the author of "Mastering the Grain Markets: How Profits 
Are Really Made" and can be reached at masteringthegrainmarkets@gmail.com or on 
Twitter @elainekub.




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