DTN Midday Livestock Comments

GENERAL COMMENTS:

Moderate trade has developed at midday in the North at $215, $6-7 higher than last week. Light trade volume is evident in parts of the South at $136, $4-5 higher than last week. According to the midday report, the national hog base is $1.45 lower compared with the Prior Day settlement ($67.00-74.00, weighted average $72.18). Corn futures at midday are generally 4 cents lower, pressured somewhat by a drier seven-day forecast. Wall Street is moving higher near the noon hour with the Dow positive by 57 points and the Nasdaq better by 28.

LIVE CATTLE:

Challenging the early May highs, live contracts are surging higher at midday, fueled by short covering, technical buying, and country reports of greater packer spending. If bulls hold the high ground through the close, spot June stands to breakout of a lateral range in place for 30 days or more. Note that October and December are now trading on the cusp of new contract highs. Beef cut-outs are mixed at midday, up 0.04 (choice, $245.50) to off $1.08 (select, $217.10) with moderate box movement (41 loads of choice cuts, 31 loads of select cuts, 8 load of trimmings, 12 loads of coarse grinds).

FEEDER CATTLE:

The bullish heat is even hotter here at midday with gains as much as 322 to 450 points. Indeed, a majority of months at this time are locked up the 450-point limit.

LEAN HOGS:

Although lean hogs started the day with moderate gains, prices have flipped and are now, for the most part, trading 15 to 82 points lower. Given how leans contracts are moving in the opposite direction of the cattle complex, it's a good bet that dome traders are unwinding hog/cattle spreads. The carcass value is about steady at midday with loin and belly strength offsetting weakness in butts, picnics, ribs, and hams. Pork cut-out: $91.10, up 0.10. CME cash lean index for 05/30: 76.53, up 0.08 (DTN Projected lean index for 05/31: 76.79, up 0.26).

John A. Harrington

(ES)

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