DTN Midday Livestock Comments

General Comments

Active buying quickly moved into livestock trade as traders quickly offset pressure late last week. This is creating additional optimism in all livestock trade, leading to triple-digit gains. Corn futures are mixed in moderate trade. July corn futures are 1/4 cent lower. Stock markets are higher in light trade. Dow Jones is 133 points higher with NASDAQ up 113 points.

LIVE CATTLE:

Active buyer support has returned to the complex Monday morning with traders quickly and aggressively backing away from late-week losses. Following the uncertainty with tariff levels on Mexican products, the market is relieved that a deal has been reached in order for trade to continue unrestricted. This could add additional long-term support to live cattle trade, but traders are closely focusing on the ability to develop sustained support in beef values. Cash cattle interest remains quiet with limited overall direction developing Monday. Following the light trade last week, packers remain short-bought, but the higher futures prices are likely to keep feeders from settling too early during the week. Asking prices and bids are undeveloped at this point, and may be quiet until midweek. Boxed Beef cut-outs at midday are mixed, $1.55 higher (select) and down $0.70 per cwt (choice) with light movement of 47 total loads reported (17 loads of choice cuts, 9 loads of select cuts, 11 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Active buying is quickly moving into cattle trade Monday morning with feeder cattle futures holding gains of $2 to $2.50 per cwt higher through most of the morning. The renewed confidence is helping to instill stronger support across the entire market with traders looking for firmness to develop through the rest of the complex. This may add increased overall support in the next couple of days. Trader remains within a wide trading range, that strong triple-digit moves in either direction are unlikely to cause any technical direction shift over the near future.

LEAN HOGS:

Prices have surged higher late Monday morning as traders try to quickly back away from pressure seen at the end of last week. The combination of continued uncertainty in China as well as proposed tariffs against Mexico lead to widespread market pressure through the last week. Now that agreements have been worked out with Mexico, there is optimism that renewed export demand will be seen in the coming weeks. Lean hog futures have access to expanded trading limits Monday, but so far gains have been contained to $2 to $2.80 per cwt in nearby futures. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.80 at $75.09 per cwt with the range from $68.00 to $76.50 on 3,973 head reported sold. Cash prices are unreported on the Iowa/Minnesota Direct morning cash hog report. Pork values firmed on steady to strong primal cuts. Pork cutouts added $1.49 per cwt at $84.57 per cwt with 104 loads traded. Lean hog index for 6/6 is $80.30, down 0.26, with a projected two-day index at $79.95, down 0.35.

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

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