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DTN Midday Livestock Comments 05/20 11:37
Cattle Dig a Deeper Hole Friday Morning
Heading into Friday's afternoon, the cattle market is desperate for support
while the lean hog contracts keep their modest rally.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The livestock complex is a dreary place to be if you're in the cattle
market, but the lean hog contracts are holding their own heading into Friday's
afternoon. Friday afternoon the cattle market will see another Cattle on Feed
report released, which will be the center of the market's attention Friday
afternoon. July corn is down 7 cents per bushel and July soybean meal is up
$3.10. The Dow Jones Industrial Average is down 354.02 points.
LIVE CATTLE:
The live cattle market hasn't seen much support through Friday's trade and
it's likely that the day rounds out the week with this lower tone. June live
cattle are up $0.05 at $131.60, August live cattle are down $0.40 at $131.62
and October live cattle are down $0.47 at $137.52. The combination of the
marketplace's worrisome tone, as it watches our economy crumble, along with the
cash cattle market's measly interest and questionable boxed beef demand has the
live cattle market quivering. But to be fair to the market and understand its
seasonality, keep in mind that prices all fall lower heading into the summer
months as supplies of market-ready cash cattle become ample. The cash cattle
market hasn't seen any renewed interest and it's likely that the week's
business is done with. Throughout the week, Southern live cattle have traded
for $136 to $138 ($2.00 lower) and Northern dressed cattle traded for $223 to
$228 ($3.00 lower).
Boxed beef prices are mixed: choice up $1.08 ($262.78) and select down $1.03
($245.03) with a movement of 58 loads (25.61 loads of choice, 8.50 loads of
select, 12.35 loads of trim and 11.92 loads of ground beef).
FEEDER CATTLE:
The recent change in corn/feeder cattle prices has shifted as the feeder
cattle market watches the deferred live cattle contracts venture lower. When
the live cattle market's deferred 2022 contracts held substantial premium to
the spot market, feeders were hopeful that the input prices that it requires to
feed cattle today would be compensated with stronger fat cattle prices toward
the year's end. However, as the live cattle market falls under pressure,
feeders are thankful to see the corn market's regression but are uneasy as the
live cattle market isn't seeing the support it had earlier. August feeders are
down $1.00 at $164.20, September feeders are down $0.85 at $167.05 and October
feeders are down $0.70 at $169.50.
LEAN HOGS:
While the rest of the livestock complex trends lower, the lean hog contracts
are grabbing all they can take heading into Friday's afternoon. June lean hogs
are up $2.10 at $107.40, July lean hogs are up $0.85 at $107.82 and August lean
hogs are up $0.60. The market has seen tremendous support both technically and
fundamentally as pork cutout values and the cash hog market has been
supportive. Traders are looking at the market and analyzing their positions, so
long as support continues to flow into the marketplace, it's likely that they
continue to support it as well.
The projected lean hog index for April 19 is up $0.80 at $101.17, and the
actual index for May 18 is up $0.29 at $100.37. Hog prices are higher on the
Daily Direct Morning Hog Report, up $2.02 with a weighted average of $112.25,
ranging from $104.00 to $118.00 on 5,870 head and a five-day rolling average of
$108.26. Pork cutouts total 160.27 loads with 148.31 loads of pork cuts and
11.95 loads of trim. Pork cutout values: up $5.18, $108.64.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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