DTN Midday Livestock Comments 06/01 11:42
Feedlots Hold Out for More Money Thursday
The cash cattle market has yet to really see what will develop in the cash
sector as feedlots hold out for more money.
DTN Livestock Analyst
Both the live cattle and feeder cattle market are rallying into Thursday's
noon hour as traders are anxiously awaiting to see what develops in the cash
market. Meanwhile, the lean hog market isn't as optimistic as its market is
trading mostly lower after posting two substantially higher days earlier this
week. July corn is up 1 3/4 cents per bushel and July soybean meal is up $6.80.
The Dow Jones Industrial Average is up 213.54 points.
You could call this week's draw out cash cattle trade a slow game of cat and
mouse as feedlots remain clam knowing that packer interest will need to
increase as the minutes tick by. However, this week's trade is more card game
when all the players have their poker faces on, as feedlots take an extra drag
on their cigars, blow their smoke aside and then lean in next to packers and
ask, "how bad do you want them?" There are bids of $170 to $171 being offered
in Kansas, and bids of $183 to $185 live being offered in Colorado and
Nebraska, as well as a bid of $288 dressed in Nebraska, but, at this point,
feedlots have elected to let those offers sit on the table. Packer interest
should improve as the afternoon passes by because packers simply cannot afford
to be complacent in this week's market and come out short bought. The waiting
nature of the cash cattle complex has traders chomping at the bit as they
anxiously wait to see what prices do this week. June live cattle are up $3.67
at $172.80, August live cattle are up $3.25 at $170.87 and October live cattle
are up $2.92 at $174.70.
Boxed beef prices are higher: choice up $1.23 ($307.07) and select up $0.01
($287.16) with a movement of 72 loads (50.77 loads of choice, 17.84 loads of
select, zero loads of trim and 3.16 loads of ground beef).
Thanks to the continued support of the live cattle complex, the feeder
cattle contracts are still trading higher even though corn prices are now
trading $0.02 to $0.08 higher in the nearby contracts. The live cattle market
is seeming to rip-roar through Thursday's trade with feedlots letting packers
sit anxiously as they wait for them to up their bids. It's likely that when
cash cattle trade does develop this week that it will be steady to somewhat
higher, which should help add even more support to feeders. August feeders are
up $0.30 at $239.47, September feeders are up $0.62 at $242.82 and October
feeders are up $0.62 at $244.75.
The lean hog complex has traded mixed throughout Thursday's market as
traders are leery of advancing the market much more, but do appreciate the
fundamental support that's helped support the complex this week. June lean hogs
are up $0.27 at $82.85, July lean hogs are down $1.77 at $81.55 and August lean
hogs are down $2.20 at $79.65. It's quite surprising that morning cash prices
are up as aggressively as they are, which likely means that packers entered
into this week's market short bought. Demand will likely remain strong through
the afternoon, but Friday's market may not see the same interest.
The projected lean hog index for May 31 is up $0.10 at $79.63, and the
actual index for May 30 is down $0.55 at $79.53. Hog prices are higher on the
Daily Direct Morning Hog Report, up $5.13 with a weighted average price of
$85.58, ranging from $79.00 to $90.00 on 11,630 head and a five-day rolling
average of $81.18. Pork cutouts total 118.20 loads with 104.16 loads of pork
cuts and 14.03 loads of trim. Pork cutout values: up $0.35, $85.62.
ShayLe Stewart can be reached email@example.com
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