DTN Midday Livestock Comments

GENERAL COMMENTS:

Wide price swings have quickly moved into the complex. This could bring some additional market volatility through the rest of the session. Sharp triple-digit gains in cattle trade are being offset by lean hog market pressure. Corn prices are higher in light trade. July corn futures are 3 cents higher. Stock markets are mixed in light trade. The Dow Jones is 63 points lower while Nasdaq is up 8 points.

LIVE CATTLE:

Live cattle futures are holding strong triple-digit gains following buyers flooding back into the market late in the morning. June futures have posted a $2.60 per cwt rally, moving prices to $107.32 per cwt. There is increased overall buyer support developing in the market as traders seem to be focused on longer-term market support that could rally through the rest of the week. Cash cattle activity remains sluggish with just a few token bids developing in the South with early bids seen at $107 per cwt. There is expected to be some additional market support seen following increased future price gains. Asking prices have developed in some areas with prices at $114 to $115 per cwt. It isn't likely that sales develop until later in the week. Boxed Beef cut-outs at midday are mixed, $0.27 higher (select) and down $0.03 per cwt (choice) with light movement of 81 total loads reported (36 loads of choice cuts, 28 loads of select cuts, 10 loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have rallied higher with prices seen from $1 to $2 per cwt higher midday. Early mixed trade in the complex has allowed markets to struggle to find buyer activity. But as live cattle futures surged higher through morning trade, feeder cattle futures quickly adjusted higher. It is likely that additional gains will continue to develop through the rest of the session, holding current market support.

LEAN HOGS:

Triple-digit losses continue to hold through the lean hog futures complex. July contracts continue to lead the market lower with a $1.52 per cwt loss. There is increased pressure in all markets with traders focusing on the price gap between cash and futures trade. Although firm support is developing in fundamentals, the overall futures trade remains extremely weak. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.82 at $71.24 per cwt with the range from $64.00 to $73.00 on 4,951 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $1.15 at $72.51 per cwt with the range from $64.00 to $73.00 on 2,440 head reported sold. The National Pork Plant Report posted 178 loads selling with carcass values gaining $1.58 per cwt. Lean hog index for 6/01 is at $71.08 up 1.07 with a projected two-day index of $71.73, up 0.65.

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

(SK)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.