DTN Midday Livestock Comments 05/23 12:17
Pressure Develops in Cattle Trade Tuesday
Despite cattle markets sliding lower Tuesday morning, strong gains have
moved into the hog complex. Renewed buyer support is seen across the hog market
as summer contracts have gained support, moving above $80 per cwt.
By Rick Kment
Mixed trade is seen in livestock futures is seen as cattle futures are
shifting lower while firm gains have quickly developed in the lean hog complex.
Strong gains have developed in the lean hog market following summer contracts
moving through resistance levels of $80 per cwt. Pressure is seen in all nearby
contracts as traders quickly back away from the early week gains. Corn prices
are lower in light trade. July corn futures are 4 cents lower. Stock markets
are mixed in light trade. The Dow Jones is 37 points higher while Nasdaq is
down 4 points.
Market pressure has developed at midday as nearby pressure is developing
across the summer contract months. June and August futures are holding 60 to 90
cent losses despite light trade volume seen across the market. June futures
remain at $123 per cwt as traders seem to be focused on position adjustments
due to overall lack of volume in the market. Cash cattle activity is still
silent with bids and asking prices undeveloped Tuesday at midday. The inability
to bring about active interest before midweek at this point does very little
with most trade likely to be seen in the last half of the week. With a short
procurement week next week may limit the amount of cattle actually needing to
be sold this week. Beef cut-outs at midday are mixed, $0.32 Higher (select) and
down $1.42 per cwt (choice) with light movement of 66 total loads reported (35
loads of choice cuts, 20 loads of select cuts, 4 loads of trimmings, 7 loads of
Feeder cattle futures are mixed to mostly lower as May contracts are holding
a 10 cent gain while the rest of the complex is under pressure following the
recent softness developing in the live cattle market. August futures seem to be
leading the downward trend, holding a 75 cent per cwt loss, as traders are
starting to pull back from the sharp triple digit gains which developed Monday.
Uncertainty surrounding support at $153 per cwt in summer feeder cattle futures
could limit further market buyer interest and summer trade activity.
Lean hog futures have rallied higher as strong buyer support quickly moved
back into the complex. This support is holding June and July futures above the
$80 per cwt levels, which is sparking renewed underlying support in all nearby
contracts. Additional fundamental support is also developing with firm cash
gains seen in the morning report and a strong market gain in the pork cutout
value. Additional pre-holiday gains may help to bring about increased market
strength at the end of the month. If all summer contracts can close the month
of May over $80 per cwt, increased technical support is likely to develop
across the entire market which will likely reach through the next few weeks.
Cash prices are higher on the National Direct morning cash hog report. The
weighted average price added $0.21 at $70.71 per cwt with the range from $65.00
to $72.00 on 4,906 head reported sold. Cash prices are lower on the Iowa
Minnesota Direct morning cash hog report. The weighted average price lost $1.02
at $69.80 per cwt with the range from $65.00 to $71.00 on 754 head reported
sold. The National Pork Plant Report reported 242 loads selling with prices
adding 1.78 per cwt. Lean hog index for 5/19 is at $75.89 up $0.34 with a
projected two-day index of $75.94 down $0.05.
Rick Kment can be reached at firstname.lastname@example.org
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