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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
DTN Analyst

GENERAL COMMENTS: 

   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.

   LIVE CATTLE:

   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 
ground beef). 

   FEEDER CATTLE: 

   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 HOGS:

   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 rick.kment@dtn.com 


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