DTN Midday Livestock Comments 06/05 11:36
Cheaper Corn Pushes Cattle Higher Midday Monday
With corn prices lower again Monday, both the live cattle and feeder cattle
markets are trading fully higher to start the week.
DTN Livestock Analyst
Both the live cattle and feeder cattle contracts are rallying into Monday's
noon hour, but the lean hog market is trading mixed as its own market is torn
on what direction it should trade. Either way, with corn prices trading lower
thus far, cattlemen are eager at the opportunity that could loom if feed prices
continue to dwindle. July corn is down 12 1/2 cents per bushel and July soybean
meal is up $0.20. The Dow Jones Industrial Average is down 60.97 points.
The live cattle complex is running into Monday's market with the same
vigorous attitude that it possessed last week. It's helping matters that boxed
beef prices are continuing to see tremendous support, which consequently keeps
packers engaged in the cash market. It's too early to tell what cash cattle
prices will do this week, but feedlots are seeming to grow stronger in their
quest for more market leverage and are understanding that, if they want higher
prices, they have to market their cattle accordingly. June live cattle are up
$0.92 at $177.35, August live cattle are up $0.60 at $173.50 and October live
cattle are up $0.35 at $176.35.
Boxed beef prices are higher: choice up $3.76 ($313.69) and select up $5.16
($296.09) with a movement of 55 loads (25.58 loads of choice, 10.03 loads of
select, 8.14 loads of trim and 11.11 loads of ground beef).
The feeder cattle contracts are having no issue trading higher as the corn
complex trades $0.03 to $0.10 lower into Monday's noon hour. With many of the
Western Mountain states getting moisture over the last couple of weeks, the
sentiment throughout the feeder cattle market has been extremely strong as
ranchers are seeing some range/grassland improvement and as the interest in
feeders continues to be extremely high throughout the countryside. With the
live cattle market's support, the only hindering factor that the feeder cattle
market must closely watch is corn prices, and, thus far Monday, they're trading
lower. August feeders are up $0.70 at $242.60, September feeders are up $0.62
at $245.62 and October feeders are up $0.57 at $247.57.
The lean hog complex has grown stronger as the day has traded on, but the
nearby contracts are still struggling with the deferred contracts trade
slightly higher. June lean hogs are down $0.97 at $85.72, July lean hogs are
down $0.22 at $84.42 and August lean hogs are down $0.52 at $81.77. The entire
lean hog complex is a mixed marketplace Monday morning as pork cutout values
are sharply higher, but cash prices are still trading slightly lower. Once
again, the wild nature of Monday's midday carcass price is being thrown out of
whack by a $36.33 rally in the belly, and by a $10.01 rally in the ham. Be on
the look out for afternoon cutout prices because anything could be in the cards.
The projected lean hog index for June 2 is up $0.69 at $81.21, and the
actual index for June 1 is up $0.89 at $80.52. Hog prices are lower on the
Daily Direct Morning Hog Report, down $1.07 with a weighted average price of
$80.30, ranging from $80.00 to $89.00 on 3,490 head and a five-day rolling
average of $81.90. Pork cutouts total 154.30 loads with 138.20 loads of pork
cuts and 16.10 loads of trim. Pork cutout values: up $8.06, $92.78.
ShayLe Stewart can be reached firstname.lastname@example.org
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