DTN Midday Livestock Comments 05/31 11:29
Weak Corn Prices Propel Livestock Contracts
The livestock complex is trading higher as traders again see the opportunity
amid a softer corn market.
DTN Livestock Analyst
It's another day when the livestock complex is trading higher primarily
thanks to the regression seen in the corn complex. With inputs a major factor
in ranch costs, seeing feed prices decline is a pleasant gesture that both
operators and traders warmly welcome. July corn is down 4 3/4 cents per bushel
and July soybean meal is down $2.50. The Dow Jones Industrial Average is down
The live cattle complex is again trading higher as traders note the
regression in corn prices and are chomping at the bit to see what develops in
this week's cash cattle market. June live cattle are steady at $168.87, August
live cattle are up $0.20 at $167.35 and October live cattle are up $0.45 at
$171.77. The big question of this week's live cattle market is: What are cash
cattle prices going to do? On one hand, you could argue that packers got enough
cattle bought last week and that prices are going to trade steady to somewhat
lower. On the other hand, with beef demand as supportive as it is, packers
can't afford to slow down processing speeds much more as they have money to be
made from beef sales. No cash cattle trade has been reported at this point, and
bids and asking prices aren't even listed yet. Trade is expected to be delayed
until Thursday if not potentially Friday.
Boxed beef prices are higher: choice up $0.63 ($305.59) and select up $0.44
($288.21) with a movement of 80 loads (50.17 loads of choice, 12.24 loads of
select, 9.62 loads of trim and 8.01 loads of ground beef).
The feeder cattle complex is again trading higher as the market loves to see
corn prices trading lower again Wednesday. With the nearby contracts trading
anywhere from $0.06 to $0.08 lower, feeders feel more than comfortable trading
higher as demand continues to flame their market higher. If cash cattle can
trade steady to somewhat higher again this week, it's tough telling how excited
the feeder cattle contracts could become. August feeders are up $1.62 higher at
$239.42, September feeders are up $1.82 at $242.57 and October feeders are up
$1.90 at $244.37.
The lean hog market is trading higher yet again, and not by a mild measure,
as some of the nearby contracts gapped higher at Wednesday's start. The
combination of cheaper corn prices amid a market that's seeing stronger demand
is helping give traders the confidence they needed in order to justify turning
the market around and allowing for stronger trade. It will remain vital to the
market's ability to continue to trade higher than pork demand remains stable,
which is a big ask of a market that has plenty of supply and of a consumer base
that's witnessing steep inflation. June lean hogs are up $1.67 at $82.50, July
lean hogs are up $3.82 at $83.35 and August lean hogs are up $3.07 at $81.87.
The projected lean hog index for May 30 is down $0.55 at $79.53, and the
actual index for May 29 is down $0.40 at $80.08. Hog prices are higher on the
Daily Direct Morning Hog Report, up $5.34 with a weighted average price of
$80.45, ranging from $76.00 to $87.00 on 6,015 head and a five-day rolling
average of $77.99. Pork cutouts total 177.41 loads with 156.89 loads of pork
cuts and 20.52 loads of trim. Pork cutout values: up $2.87, $86.55.
ShayLe Stewart can be reached firstname.lastname@example.org
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