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DTN Midday Livestock Comments          05/21 12:08

   Cattle Futures Draw Additional Buyer Support

   Strong gains have developed across feeder and live cattle futures contracts 
at midday. Support through the complex is helping bring additional interest 
back into the market at the end of the week.  

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Livestock futures are higher at midday with traders focusing on steady cash 
cattle trade and the ability to draw additional underlying support into the 
cattle complex ahead of the long weekend. Triple-digit gains are seen in both 
live cattle and feeder cattle markets which have sparked additional market 
interest. Corn prices are higher in light trade. July corn futures are 6 cents 
per bushel higher. Stock markets are higher in light trade. The Dow Jones is 13 
points higher while Nasdaq is up 18 points.

   LIVE CATTLE:

   Despite a weaker boxed beef report Thursday morning, the focus of the 
complex has been on aggressive gains over $1 per cwt at midday. Trade through 
most of the morning was firm but sluggish, but traders have quickly stepped 
back into the market as prices continue to try to narrow the discount to the 
cash market. However, at this point, live cattle futures remain contained to 
the current trading range, which may limit additional aggressive moves before 
the end of the week. Cash cattle trade is not established this morning, but the 
moderate activity seen Wednesday is likely to have set the tone for the market 
and potentially wrapped up trade in the South. Bids are developing in the North 
at $159 to $160 live and $250 to $253 dressed. Asking prices are at $163 in the 
South and $260 in the North. Beef cut-outs at midday are lower, $0.49 lower 
(select) and down $0.76 per cwt (choice) with light movement of 57 total loads 
reported (23 loads of choice cuts, 16 loads of select cuts, 8 loads of 
trimmings, 11 load of ground beef).

   FEEDER CATTLE:

   Strong triple-digit gains are present in feeder cattle futures with August 
leading the way with a $1.55 per cwt gain. Expectations of higher placements in 
April seem to have lost its edge as buyers have quickly returned, focused on 
the ability to draw additional buyer support back into the market.  

   LEAN HOGS:

   Early losses have been quickly replaced by moderate to strong gains in the 
lean hog futures. Higher pork values in the morning report created some needed 
stability. June futures are leading the market higher with an 82 cent per cwt 
rally at midday, giving support to the entire complex. Cash prices are lower on 
the National Direct morning cash hog report. The weighted average price fell 
$1.41 per cwt to $77.25 per cwt with the range from $70.50 to $79.50 per cwt on 
2,630 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 120 loads selling with prices adding $1.30 per cwt. Lean hog 
index for 5/18 is at $82.57 up 0.51, with a projected two-day index of $83.05 
up 0.48.  

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


(BAS)

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