DTN Midday Livestock Comments          05/20 12:12

   Feeder Cattle Lead Cattle Market Lower

   Strong underlying pressure is moving through the entire cattle complex as 
traders back away from last week's gains. Firm pressure developed through live 
cattle trade, with hog markets unable to hold early gains. 

By Rick Kment
DTN Analyst

General Comments

   Firm pressure moving through feeder cattle trade Monday morning has sparked 
additional selling interest in live cattle trade. Lean hog futures have given 
back early buyer interest, with prices mixed in a narrow to moderate range. 
Corn futures are higher in active trade. July corn futures are 7 cents higher. 
Stock markets are lower in light trade. Dow Jones is 56 points lower with 
Nasdaq down 45 points. 

   LIVE CATTLE:

   Limited selling interest continues to hold live cattle trade lower late 
Monday morning with June futures holding a 20 cent loss. The lack of aggressive 
selling contracts despite strong gains in corn futures and triple-digit 
pressure in feeder cattle futures has helped to spark additional stability 
through nearby live cattle trade. Long-term demand continues to develop through 
the entire cattle complex traders focus on the ability to increase domestic and 
global beef demand through the next couple of months. Cash cattle interest 
remains sluggish Monday with bids and asking prices still undeveloped. 
Increased interest may start to develop midweek, although trade may not develop 
until midweek or later. Boxed Beef cut-outs at midday are unreported at this 
time.

   FEEDER CATTLE:

   Firm underlying pressure has moved through the entire complex as 
triple-digit losses are holding through the entire complex. Additional buyer 
support sweeping through corn and soybean markets Monday morning has added 
increased pressure to feeder cattle trade. August through January futures are 
holding $1.25 to $1.40 per cwt losses with increased overall weakness 
developing in all cattle trade. It is expected that limited market activity 
will develop through the end of the session, although prices are likely to hold 
in the current weaker pattern.

   LEAN HOGS: 

   Lean hog futures are mixed to mostly lower midday following the inability to 
hold strong early gains. June futures are leading the complex lower with $1.15 
per cwt losses as traders adjust price levels following last week's market 
rally. The inability to sustain initial gains helped to bring additional 
selling activity into nearby and deferred contracts. There is expected to be 
some additional market shifts as traders balance between firm domestic demand 
and uncertainty of overall global economic growth. Recent news report, not only 
focusing on the increased demand for global pork supplies, but focusing on 
potential increased meat prices to consumers is starting to limit previous 
bullish market support seen last week. Cash prices are lower on the National 
Direct morning cash hog report. The weighted average price is down $0.96 at 
$80.19 per cwt with the range from $72.50 to $80.19 on 5,363 head reported 
sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota 
Direct morning cash hog report. Pork values surged higher with strong gains in 
most primal cuts. Pork cutouts added $3.82 per cwt at $89.09 per cwt with 105 
loads traded. Lean hog index for 5/16 is $84.59 up 0.39, with a projected 
two-day index is unchanged.

   Rick Kment can be reached at [email protected] 


(CZ)

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