DTN Midday Livestock Comments          05/25 11:28

   Midweek Point Brings Ample Support to Livestock Contracts

   The cash cattle market has yet to see any trade develop for the day, and 
given that only a small handful of cattle traded Tuesday afternoon, the market 
needs to see some business get underway.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   Thus far, it's been a rather supportive and encouraging day for the 
livestock sector. The live cattle and feeder cattle contracts are trading 
higher, as the corn market works its way lower, and feedlots are anxiously 
sitting around waiting for a bid. Meanwhile, the nearby lean hog contracts are 
trading higher as the market found support Tuesday afternoon with a higher cash 
market and stronger pork cutout values. July corn is down 7 1/2 cents per 
bushel and July soybean meal is down $6.40. The Dow Jones Industrial Average is 
up 47.33 points.

LIVE CATTLE:

   The live cattle contracts are again trading higher as the market finds ample 
technical support and likes to see that processing speeds are keeping with 
their vigorous pace, and that boxed beef demand has grown firmer. June live 
cattle are up $0.20 at $132.92, August live cattle are up $0.12 at $132.87 and 
October feeder cattle are up $0.05 at $138.67. Given that the market is far 
from resistance, its upward potential isn't limited so long as the fundamental 
side of the market holds somewhat steady. The country saw a little bit of 
business develop Tuesday afternoon but largely the market has still yet to 
trade for the week. Asking prices for the day are noted at $138-plus in the 
South and $226-plus in the North, and bids of $222 to $224 are being offered in 
Nebraska but otherwise the market is quiet.

   Boxed beef prices are mixed: choice down $0.35 ($263.30) and select up $0.29 
($245.64) with a movement of 54 loads (35.65 loads of choice, 10.41 loads of 
select, zero loads of trim and 7.49 loads of ground beef).

FEEDER CATTLE:

   As the corn market continues to cascade lower, the feeder cattle contracts 
are pushing a modest rally as the day finds support from weaker inputs and 
modest support from the live cattle market. August feeders are up $0.50 at 
$168.70, September feeders are up $0.55 at $171.62 and October feeders are up 
$0.80 at $174.27. So much of the feeder cattle market's outcome depends on the 
corn market right now. Yes, the country needs rain, yes, the market needs to 
see strong consumer demand, but with cost of gains already historically high -- 
feeder cattle buyers are glued to the corn market as it dictates what they can 
afford to pay for feeders. Given that early summer sales are about to begin in 
a month, everyone is scrambling to get a gauge on what feeder cattle prices 
could be this year.

LEAN HOGS:

   After rounding out lower Tuesday afternoon, the nearby lean hog contracts 
are back to rallying modestly while the deferred months aren't so optimistic. 
June lean hogs are up $0.40 at $109.42, July lean hogs are up $0.27 at $109.30 
and August lean hogs are up $0.07 at $109.10. The hog market is relying on 
unanimous support in order to keep its market trending higher. So, on Monday 
afternoon, when pork cutout values closed lower and cash prices saw little 
interest, Tuesday's market was cautious as it needed to see better support. 
Thankfully, by Tuesday's end, the market was again supported by the cash market 
and by pork cutout values. Come Wednesday, traders are back to working the 
front months higher. Much of Thursday's outcome will depend on how trade 
handles itself this afternoon.

   The projected lean hog index for May 24 is up $0.84 at $103.88, and the 
actual index for May 23 is up $0.96 at $103.04. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $0.57 with a weighted average of $111.96, 
ranging from $100.00 to $116.50 on 7,414 head and a five-day rolling average of 
$111.48. Pork cutouts total 141.83 loads with 132.25 loads of pork cuts and 
9.58 loads of trim. Pork cutout values: down $1.06, $107.18.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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