DTN Midday Livestock Comments 05/31 12:04
Triple-Digit Bullishness Dominates Cattle Complex at Midday
Live and feeder futures are racing higher at midday, supported by aggressive
short covering and technical buying. Lean hog contracts are mostly higher near
the top of the noon hour with spillover buying somewhat qualified by uncertain
By John Harrington
Cattle buyers are focused on the collection of showlists at midday and
little else. Ready numbers appear to be mixed, larger in the South (especially
Texas) and smaller in the North. Overall, the post holiday offering looks
larger than the previous week. Feedlot managers will certainly be pricing
cattle higher this week, but no one seems to be in a hurry to put their foot on
base. The midday hog report is not yet available. The corn market is 7-8 cents
lower in late morning business, checked by spillover selling from wheat and
beans on one hand and lackluster export inspections on the other. U.S. stocks
are trading mixed as investors sort through data for indications on the timing
of the next rate hike. The Dow is 92 points lower at the time with the Nasdaq
currently 3 higher.
Live contracts gapped higher on the opening and show no intentions to look
back. Triple-digit progress at midday is fueled by aggressive short covering,
technical buying, and cash premiums. Chart resistance sits near the May highs
between 123 and 124. Beef cut-outs are mixed at midday, up .32 (choice,
$222.39) to off 0.08 (select, $201.49) with light box movement (33 loads of
choice cuts, 16 loads of select cuts, 8 loads of trimmings, 16 loads of coarse
Feeders are sharply higher as we move toward the top of the noon hour,
following the blistering pace of their live counterparts. The softer action in
the early-week corn trade is also probably helpful.
The lean hog trade is also showing decent progress at midday, though bullish
enthusiasm seems a bit more cautious than that seen through the cattle complex.
Now that we've moved past Memorial Day, the big question may be whether or not
the summer board wants to anticipate much of a cash rally over the next 30-60
days. More specifically, can July punch through overhead resistance at 84? The
pork carcass value is some higher at midday, supported by stronger demand for
loins, picnics, and ribs. Pork cut-out: $83.81, up 0.25. CME cash lean for
05/25: 78.60, off 0.27 (DTN Projected lean index for 05/26: 78.23, off 0.37).
John A. Harrington can be reached at firstname.lastname@example.org
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