DTN Midday Livestock Comments 06/03 12:25
Livestock Contracts Seen with Optimism
Wednesday morning livestock contracts were bearish but as the day has
progressed optimism and support has modestly rallied throughout the industry.
DTN Livestock Analyst
Wednesday may have started the day off lower but has since rallied most of
the livestock complex and heads into Wednesday's noon hour optimistically.
After the Fed Cattle Exchange some cash cattle trade started to develop just
slightly lower compared to Monday's initial trade. July corn is down 1 cent per
bushel and July soybean meal is up $1.20. The Dow Jones Industrial Average is
up 379.87 points and NASDAQ is up 37.91 points.
Live cattle contracts have absorbed some of the industry's excitement and
are now trading modestly higher. June live cattle are up $0.17 at $95.47,
August live cattle are up $0.90 at $97.10 and October live cattle are up $0.32
at $99.77. After the Fed Cattle Exchange a light round of trade started to
develop throughout most areas. Southern live cattle are trading mostly at $117,
which is $1.00 lower than Monday's trade but mostly steady with last week's
weighted average. Northern dressed cattle are trading mostly at $185, which is
fully steady with last week.
The Fed Cattle Exchange Auction listed a total of 1,736 head, with 199 head
actually sold, 1,537 head listed as unsold, and zero head listed as PO (Passed
Offer). The state-by-state breakdown looks like this: KS 1,104 total head, with
no sales; NE 284 total head, with no sales; TX 348 total head, with 199 head
sold at $110.50, 149 head were unsold. The delivery date/weighted averages
breakdown is as listed: 1-9 day delivery: 739 head total, no sales; 1-17 day
delivery 997 head total, 199 head sold, with a weighted average price of
It's strange that the August live cattle contract is trading higher than
June live cattle contract considering that August is a tough month for cash
cattle prices, the days are hotter and harder on cattle feeders and the
industry is expecting and exuberant amount of fat cattle to be around still at
Boxed beef prices are lower: choice down $18.72 ($300.01) and select down
$10.92 ($279.66) with a movement of 69 loads (39.03 loads of choice, 14.45
loads of select, zero loads of trim and 15.55 loads of ground beef).
Feeder cattle contracts may have started the day out lower but are nearing
the noon hour fully higher. August feeders are up $0.47 at $133.90, September
feeders are up $0.52 at $135.42 and October feeders are up $0.52 at $136.20.
The country will continue to sell feeder cattle with gusto and excitement as
buyers have been interested and willing to pay respectable prices for those
cattle. The hiccup that could shake the feeder cattle market is if cash cattle
prices start to pull back as they do so abruptly.
The lean hog market is ready to trade higher and is in deferred contracts
but pressure from lower cutouts and uncertainty surrounding China and their
willingness to buy pork remains bothersome for nearby contracts. June lean hogs
are down $2.30 at $50.10, July lean hogs are down $0.65 at $54.22 and August
lean hogs are up $0.02 at $55.57. Tuesday's closing pork cutouts totaled an
enormous 571.70 loads, and with Wednesday already posting 305.79 loads, it
could be another massive day for pork cutouts.
The projected lean hog index for 6/2/2020 is down $2.17 at $57.06 and the
actual index for 6/1/2020 is down $0.73 at $59.23. Hog prices are lower on the
National Direct Morning Hog Report, down $1.25 with a weighted average of
$33.48, ranging from $28.00 to $37.00 on 5,312 head and a five-day rolling
average of $35.29. Pork cutouts total 305.79 loads with 273.79 loads of pork
cuts and 32.00 loads of trim. Pork cutout values: down $0.27, $74.10.
ShayLe Stewart can be reached [email protected]
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