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.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   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

   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 
$110.50.

   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 
that time.  

   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

   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.

   LEAN HOGS

   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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