DTN Midday Livestock Comments

Firm Buying Redevelops in Cattle Futures

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Russ Quinn)
GENERAL COMMENTS:

Firm gains have redeveloped in feeder cattle futures at midday as traders have steeped back into the market. Additional support is moving back into some live cattle contracts, although a trade volume is limited. Overall market activity is likely to remain sluggish through the rest of the Tuesday trading session. Corn prices are lower in light trade. July corn futures are 7 cents lower. Stock markets are lower in light trade. The Dow Jones is 34 points lower while Nasdaq is down 4 points.

LIVE CATTLE:

Mixed trade is seen through live cattle futures with steady to 60 cent gains seen in nearby contracts while light loses have developed through deferred contracts. Narrow market moves are seen through the rest of the complex as traders are looking for very little additional outside or fundamental market activity to develop. This could limit widespread price shifts across the live cattle trade. Cash cattle activity remains light Tuesday with bids and asking prices still undeveloped as packers and feeders return from the long holiday weekend. Show lists are generally larger with Nebraska showing a few less market ready steers and heifers. But the overall trend is a larger number of cattle available on lists early in the week. Beef cut-outs at midday are mixed, $1.39 higher (select) and down $0.37 per cwt (choice) with light movement of 64 total loads reported (24 loads of choice cuts, 27 loads of select cuts, 8 loads of trimmings, 5 loads of ground beef).

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Firm buyer support has returned to the feeder cattle futures complex with short covering activity developing following strong liquidation seen through the end of last week. Even though early losses were seen across the entire cattle market, buyers seemed willing to hang around the market and wait until selling pressure ran out of gas. This has quickly allowed nearby contracts to post triple digit gains, moving $1 to $1.50 per cwt higher at midday. Even though the market still remains weak and is focusing on the larger than expected placements seen in April, the ability to hold prices near $148 per cwt could help to establish some stability through the rest of the week.

LEAN HOGS:

Mixed trade continues to hold through lean hog futures, but the lack of support in cash markets Tuesday morning and pullback in front month June futures seems to be putting a cautionary tone through the entire nearby market. Most of the selling pressure is seen in June and July futures, although this pressure is focusing on position taking after setting contract highs late last week. The overall market remains bullish and is not likely to change significantly on just one days market prices. Cash prices are lower on the National Direct morning cash hog report. The weighted average price lower $0.83 at $70.26 per cwt with the range from $67.00 to $71.50 on 2,895 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 150 loads selling with prices adding 0.18 per cwt. Lean hog index for 5/25 is at $76.34 up $0.09 with a projected two-day index of $76.45 up $0.11.

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

(ES)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment