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DTN Midday Livestock Comments 05/13 11:52
Cattle Trend Higher Going Into Monday's Noon Hour
With the feeder cattle complex trending higher, the live cattle market is
trading mostly higher in its shadow as traders continue to look for promising
news that beef demand is coming to fruition.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The livestock complex is trading mixed going into Monday's noon hour as the
cattle complex is aiming to move its contracts higher while the lean hog
complex struggles to gain enough technical support to advance its market. With
last week's cash cattle trade totaling an impressive 83,747 head, packers have
likely bought enough supply in the last three weeks to where they can avoid
having to pay higher prices in this week's cash trade. July corn is up 4 3/4
cents per bushel and July soybean meal is down $1.20. The Dow Jones Industrial
Average is down 11.22 points.
LIVE CATTLE:
The live cattle complex is trading in the feeder cattle market's shadow as
the market longs to trade higher but needs technical and fundamental support
before it can confidently do so. Thankfully, the feeder cattle complex is
leading the way, and with midday boxed beef prices higher, traders feel
comfortable trading the live cattle contracts mildly higher. June live cattle
are up $0.32 at $176.45, August live cattle are up $0.17 at $174.30 and October
live cattle are up $0.32 at $177.75. Again this week, monitoring beef demand
will be a key factor for the market and its ability to trade higher.
Last week's negotiated cash cattle trade saw most of the week's trade
develop on Friday, although there were a few sales reported Thursday afternoon.
Southern live cattle traded at $183 to $187, but mostly at $184, which is
steady with the previous week's weighted average, and Northern dressed cattle
traded at $294 to $296, but mostly at $295, which is steady with the previous
week's weighted average as well. Last week's negotiated cash cattle trade
totaled 83,747 head. Of that, 67% (58,294 head) were committed to the nearby
delivery and the remaining 33% (25,453 head) were committed to the deferred
delivery.
Boxed beef prices are higher: choice up $3.71 ($298.28) and select up $2.30
($286.47) with a movement of 50 loads (20.36 loads of choice, 7.83 loads of
select, zero loads of trim and 22.30 loads of ground beef).
FEEDER CATTLE:
Even with Friday's WASDE report sharing mixed news for the cattle complex,
the feeder cattle market is back to rocking and rolling as it charges higher
into Monday's noon hour. Feeder cattle have been the leading force in the
cattle market's quest to trade higher this spring, and so seeing feeders higher
at Monday's debut brings a level of encouragement to the entire cattle complex.
Timely rains and the gradual accumulation of moisture this spring are also
helping the feeder cattle market as most producers are getting ready to turn
out into summer pastures. May feeders are up $1.92 at $240.62, August feeders
are up $2.25 at $253.25 and September feeders are up $2.12 at $254.10.
LEAN HOGS:
The lean hog complex started the day out trading higher, but as time passed,
the lean hog market is now trading lower into Monday's noon hour as it is
comfortably trading in a sideways trading range. The market's fundamentals are
mixed at midday as there's been little cash interest that prices can't even be
posted without violating confidentiality clauses, but midday pork cutout values
are higher. Unfortunately, the midday carcass price is solely being skewed by
the $8.50 jump in the belly as the rest of the cuts dance around steady prices.
June lean hogs are down $0.22 at $98.15, July lean hogs are down $0.62 at
$100.82 and August lean hogs are down $0.62 at $99.95.
The projected lean hog index is delayed from the source. Hog prices are
unavailable in the Daily Direct Morning Hog Report due to confidentiality.
However, we can see that 482 head have traded and the market's five-day rolling
average sits at $91.45. Pork cutouts total 149.52 loads with 136.62 loads of
pork cuts and 12.89 loads of trim. Pork cutouts: up $1.58, $101.35.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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