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DTN Midday Livestock Comments 05/21 11:41
Cattle Trade Higher as Boxed Beef Prices Remain Supported, Corn is Lower
The cattle complex is back to rallying Tuesday as the market is seeing
plenty of support with boxed beef prices higher again and corn posing no threat
as it trades lower.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
Heading into Tuesday afternoon, the livestock complex is mixed with the
cattle sector receiving ample support but the lean hog contracts continuing to
trade lower as demand remains an issue. No cash cattle trade has developed and
it's likely trade will be delayed until Thursday or Friday again this week.
July corn is down 4 1/4 cents per bushel and July soybean meal is down $4.20.
The Dow Jones Industrial Average is up 19.52 points.
LIVE CATTLE:
With midday boxed beef prices higher and corn prices lower near noon, the
live cattle complex has sprung back to trading fully higher as the market is
seeing ample support. So long as beef demand remains steady or (even better yet
for the cattle market) higher, then traders should be able to confidently
advance the board with little trouble. It's yet to be seen what this week's
cash cattle market will do and it's likely trade will be delayed until late in
the week. A case can be made that packers will need to remain aggressive in the
cash sector as they can't afford to be too short on supplies to market to
retailers when beef prices are strong. But there's also a chance packers have
bought aggressively enough in the last four weeks to be able to forgo having to
robustly support this week's cash market. Honestly, time will tell, and demand
is going to be a large deciding factor of this week's cash cattle trade. June
live cattle are up $1.70 at $183.17, August live cattle are up $1.80 at $180.32
and October live cattle are up $1.30 at $183.10.
Boxed beef prices are higher: choice up $1.17 ($313.87) and select up $2.68
($302.03) with a movement of 56 loads (35.26 loads of choice, 8.79 loads of
select, zero loads of trim and 11.70 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is back to trading lower as the market has seen
stable support in boxed beef prices and it is encouraged that Tuesday's corn
prices are trending lower as well. It's also helpful that traders don't have to
immediately decide if they want to take on the market's resistance at its
100-day moving average. If traders continue to trade the complex steady to
slightly higher, taking on the market's 100-day moving average will be a
decision for another day. May feeders are up $1.75 at $248.45, August feeders
are up $1.02 at $259.50 and September feeders are up $1.15 at $260.80.
LEAN HOGS:
It's a dreary day for the lean hog complex as the market is mostly lower.
Some of the furthest deferred contracts are trading mildly higher, but the
lion's share of the market is continuing to trade lower. With midday pork
cutout values lower, traders are speculating that afternoon pork cutout values
could be lower too. June lean hogs are down $0.65 at $96.27, July lean hogs are
down $0.85 at $99.10 and August lean hogs are down $0.87 at $98.32.
The projected CME Lean Hog Index for 5/20/2024 is down $0.21 at $92.01 and
the actual index for 5/17/2024 is down $0.07 at $92.22. Hog prices on the Daily
Direct Morning Hog Report average $88.49, ranging from $84.50 to $90.00 on
1,248 head and a five-day rolling average of $88.90. Pork cutouts total 172.75
loads with 151.56 loads of pork cuts and 21.19 loads of trim. Pork cutout
values: down $0.99, $100.87.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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