DTN Midday Livestock Comments

GENERAL COMMENTS:

Cattle country is very quiet at midday following Wednesday's active round of business. According to the midday report, the national hog base is $1.26 higher compared with the Prior Day settlement ($55.00-65.50, weighted average $62.77). Corn futures are 7-8 cents lower moving toward the top of the noon hour, pressured by the promising of better planting weather ahead. Pressured by falling oil prices, the stock market is lower near midday with the Dow off 86 points and the Nasdaq off 14.

LIVE CATTLE:

The action in live futures through the morning has been extremely volatile and choppy. Such wild prices are not that surprising given the explosive cash action we've seen over the last 30 days. Currently, spot June is 110 points higher while the balance of the market is mostly 47 to 257 lower. Beef cut-outs are significantly higher at midday, up 0.43 (select, $215.32) to $1.25 (choice, $233.84) with light box movement (23 loads of choice cuts, 14 loads of select cuts, zero loads of trimmings, 10 loads of coarse grinds).

FEEDER CATTLE:

Feeder cattle opened significantly higher, but prices have now reversed sharply lower with prices off 240 to 485. It looks like the biggest turnaround seen here in a long time. Specifically, many issues have now slumped 700-800 points below early session highs.

LEAN HOGS:

Lean hog contracts are mixed near the top of the noon hour, up 120 to off 37. Nearby issues continue to be supported by bull spreading and impressive reports of greater packer spending in the country. Carcass value at midday is modestly higher with most of the appreciation tied to bellies and loins. Pork cut-out: $76.51, up 0.20. CME cash lean index for 05/02: 61.14, up 0.85 (DTN Projected lean index for 05/03: 62.24, up 1.10).

John A. Harrington can be reached at john.harrington@dtn.com

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