DTN Midday Livestock Comments

GENERAL COMMENTS:

Strong buyer support has quickly moved back into the live cattle and feeder cattle markets Monday morning. This support is quickly redeveloping the expectation that increased activity is seen in commodity markets and triple digit gains can spark the interest of commercial traders at the end of the month. Corn prices are higher in light trade. July corn futures are 3 cents higher. Stock markets are higher in light trade. The Dow Jones is 87 points higher while Nasdaq is up 40 points.

LIVE CATTLE:

Buying activity in the live cattle futures trade continues to move be driven by the feeder cattle complex. This support is currently driven by a $1 to $1.50 per cwt rally in August through April contracts as markets firm through the complex. June futures have pulled away from session highs, but remain above $124 per cwt at midday. The ability to trade above $125 per cwt for a portion of the morning is bringing additional longer term commercial buyer support back to the market Monday morning. Cash cattle markets remain undeveloped following the lower cash markets last week with bids and asking prices unavailable early in the week. Show lists are smaller heading into the week as packers look for the upcoming holiday weekend of lighter procurement schedules to limit overall deliveries next week. This could limit overall movement and overall activity in many areas. Beef cut-outs at midday are higher, $1.09 Higher (select) and up $0.64 per cwt (choice) with light movement of 67 total loads reported (23 loads of choice cuts, 21 loads of select cuts, 15 loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have posted an aggressive triple digit rally early Monday morning with traders building on the support seen Friday. Even though May futures remain sluggish, all other contracts have posted aggressive buyer support with August through October contracts holding gains between $2 to $2.50 per cwt. There continues to be uncertainty if there will be increased volume moving into the market through the end of the day and if these prices will be able to hold through closing bell. Because many times strong gains at midday have quickly faded in the last few minutes of trade due to light trader volume. A bullish support through the week could spark renewed fundamental support and bring increased long-term support through the entire cattle market.

LEAN HOGS:

Lean hog futures remain mixed in light trade as trades continue to focus on light commercial buyer support slowly moving back into the lean hog complex. July and August futures are leading the market higher with a 30 to 50 cent gain holding the complex together although the focus on July contracts moving above $80 per cwt seems to be the highlight of the hog market Monday morning. The rest of the complex is unwilling to take a stand on which way to move as very little fundamental direction is developing early in the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price lost $0.67 at $70.17 per cwt with the range from $69.00 to $71.00 on 3,128 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price lost $1.05 at $70.29 per cwt with the range from $69.00 to $71.00 on 348 head reported sold. The National Pork Plant Report reported 110 loads selling with prices adding 0.57 per cwt. Lean hog index for 5/19 is at $75.55 up $0.63 with a projected two-day index of $75.89 down $0.34.

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

(ES)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.