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DTN Midday Livestock Comments          05/20 11:37

   Cattle Dig a Deeper Hole Friday Morning

   Heading into Friday's afternoon, the cattle market is desperate for support 
while the lean hog contracts keep their modest rally.

ShayLe Stewart
DTN Livestock Analyst


   The livestock complex is a dreary place to be if you're in the cattle 
market, but the lean hog contracts are holding their own heading into Friday's 
afternoon. Friday afternoon the cattle market will see another Cattle on Feed 
report released, which will be the center of the market's attention Friday 
afternoon. July corn is down 7 cents per bushel and July soybean meal is up 
$3.10. The Dow Jones Industrial Average is down 354.02 points.


   The live cattle market hasn't seen much support through Friday's trade and 
it's likely that the day rounds out the week with this lower tone. June live 
cattle are up $0.05 at $131.60, August live cattle are down $0.40 at $131.62 
and October live cattle are down $0.47 at $137.52. The combination of the 
marketplace's worrisome tone, as it watches our economy crumble, along with the 
cash cattle market's measly interest and questionable boxed beef demand has the 
live cattle market quivering. But to be fair to the market and understand its 
seasonality, keep in mind that prices all fall lower heading into the summer 
months as supplies of market-ready cash cattle become ample. The cash cattle 
market hasn't seen any renewed interest and it's likely that the week's 
business is done with. Throughout the week, Southern live cattle have traded 
for $136 to $138 ($2.00 lower) and Northern dressed cattle traded for $223 to 
$228 ($3.00 lower).

   Boxed beef prices are mixed: choice up $1.08 ($262.78) and select down $1.03 
($245.03) with a movement of 58 loads (25.61 loads of choice, 8.50 loads of 
select, 12.35 loads of trim and 11.92 loads of ground beef).


   The recent change in corn/feeder cattle prices has shifted as the feeder 
cattle market watches the deferred live cattle contracts venture lower. When 
the live cattle market's deferred 2022 contracts held substantial premium to 
the spot market, feeders were hopeful that the input prices that it requires to 
feed cattle today would be compensated with stronger fat cattle prices toward 
the year's end. However, as the live cattle market falls under pressure, 
feeders are thankful to see the corn market's regression but are uneasy as the 
live cattle market isn't seeing the support it had earlier. August feeders are 
down $1.00 at $164.20, September feeders are down $0.85 at $167.05 and October 
feeders are down $0.70 at $169.50.


   While the rest of the livestock complex trends lower, the lean hog contracts 
are grabbing all they can take heading into Friday's afternoon. June lean hogs 
are up $2.10 at $107.40, July lean hogs are up $0.85 at $107.82 and August lean 
hogs are up $0.60. The market has seen tremendous support both technically and 
fundamentally as pork cutout values and the cash hog market has been 
supportive. Traders are looking at the market and analyzing their positions, so 
long as support continues to flow into the marketplace, it's likely that they 
continue to support it as well.

   The projected lean hog index for April 19 is up $0.80 at $101.17, and the 
actual index for May 18 is up $0.29 at $100.37. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $2.02 with a weighted average of $112.25, 
ranging from $104.00 to $118.00 on 5,870 head and a five-day rolling average of 
$108.26. Pork cutouts total 160.27 loads with 148.31 loads of pork cuts and 
11.95 loads of trim. Pork cutout values: up $5.18, $108.64.

   ShayLe Stewart can be reached shayle.stewart@dtn.com

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