DTN Midday Livestock Comments 05/22 12:06
Lean Hog Futures Gain Strength
Strong gains in the hog futures are being offset by moderate to sharp losses
in cattle futures. Trade remains moderate at midday.
By Rick Kment
Mixed trade in the livestock futures continues to draw additional activity
into the market at midday. Moderate gains in the lean hog market are being over
shadowed by pressure in cattle futures. Corn futures are higher at midday. July
corn futures are holding 14 cent gains at midday. Stock markets are higher in
light trade. The Dow Jones is 51 points higher while Nasdaq is up 7 points.
Live cattle futures have eroded through the morning with 40 to 60 cent
losses seen at midday. The sharp losses in the feeder cattle markets, strong
corn market gains and inability to push beef prices strongly higher is causing
additional pressure through the complex. It is uncertain just how much
additional volume will be seen through the end of the day. Cash cattle activity
is undeveloped with only a few bids seen in the South at $123 per cwt through
the morning. A few asking prices are seen at $127 in the South and $203 to $205
in the North. It could easily be the second half of the week before trade
develops. Beef cut-outs at midday are mixed, $0.18 per cwt lower (select) and
up $0.38 per cwt (choice) with moderate movement of 122 total loads reported
(43 loads of choice cuts, 49 loads of select cuts, zero loads of trimmings, 30
loads of ground beef).
Sharp losses have quickly developed in feeder cattle futures through the
morning. Deferred contracts are the most aggressively pressured as traders are
focusing on rally in the corn market. This essentially erases support seen
Tuesday, and creates questions about building any buyer support back into the
market before the Memorial Day holiday.
Moderate to strong support redeveloped through the lean hog futures market
despite the lack of momentum early in the morning. Traders are looking at
potential longer term demand as supplies may continue to tighten over the
summer. Cash prices moved lower on the National Daily Direct morning cash hog
report. The weighted average price fell $0.79 per cwt to $89.98 per cwt with
the range from $84.46 to $91.50 per cwt on 3,141 head reported sold. The
National Pork Plant Report posted 269 loads at midday with carcass values
gaining $0.62 per cwt. Lean hog index for 5/17 is at $93.18 up 0.25 with a
projected two-day index of $93.29 up 0.11.
Rick Kment can be reached at firstname.lastname@example.org
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