DTN Midday Livestock Comments

GENERAL COMMENTS:

Sharp early pressure in all livestock futures has quickly replaced recent market gains with concern that additional market weakness may flood into the complex. This could add even more uncertainty to the complex as traders have backed away from session lows, but the tone of the market still remains weak. Corn prices are higher in light trade. July corn futures are 3/4 cent higher. Stock markets are mixed in light trade. The Dow Jones is 209 points lower while Nasdaq is up 2 points.

LIVE CATTLE:

Sharp losses have quickly developed through the morning Thursday. Although live cattle futures have pulled away from session lows, the lack of support following strong gains midweek has allowed for increased market concern. Current prices are more than $1 per cwt higher than session lows as selling pressure seems to be focused on previous market movements. Traders are quickly trying to adjust market movements before the end of the month, which add even more volatility through the complex. Cash cattle remain quiet with a few scattered bids seen with bids of $108 per cwt seen on live basis in the North and South. Dressed bids are seen at $175 per cwt. Asking prices are holding at $115 and higher live and $182 to $184 per cwt dressed. It is likely that active trade will be pushed off until Friday sometime. Boxed Beef cut-outs at midday are mixed, $0.02 higher (select) and down $0.07 per cwt (choice) with light movement of 94 total loads reported (46 loads of choice cuts, 27 loads of select cuts, 14 loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Strong pressure in live cattle trade has quickly eroded any sense of buyer support seen through the complex. There is a growing focus on potential increased price volatility in all livestock trade through the end of the month of May. Although early June trade activity is not expected to see much more stability, some traders seem intent on squaring market positions by the end of the day. This has left August and September contracts with a $1 to $1.65 per cwt loss, while the rest of the complex is hanging onto moderate pressure.

LEAN HOGS:

Sharp losses quickly developed in most livestock trade Thursday morning. The initial pressure seen in nearby lean hog trade and the live cattle futures complex quickly gained momentum and pushed more selling pressure into all markets. Most contracts are holding triple-digit losses with July markets leading the complex lower with a $2.65 per cwt loss. If prices hit and hold limit losses of $3 per cwt at the end of the month, this could significantly shift the overall market direction of the complex during early June. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $1.25 at $68.14 per cwt with the range from $60.00 to $70.00 on 4,920 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $1.48 at $69.08 per cwt with the range from $60.00 to $70.00 on 2,490 head reported sold. The National Pork Plant Report posted 154 loads selling with carcass values gaining $2.18 per cwt. Lean hog index for 5/29 is at $69.50 up 0.04 with a projected two-day index of $69.63, up 0.13.

Rick Kment can be reached at rick.kment@dtn.com

(SK)

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