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DTN Midday Livestock Comments 05/07 11:37

05/07/2021


DTN Midday Livestock Comments 05/07 11:37

Friday's Modest Corn Rally Allows Feeders to Rally

The feeder cattle contracts aren't going to let Friday pass them by without
taking advantage of the market's opportunity to rally.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

If anything, the live cattle contracts should be encouraging the feeder
cattle contracts to trade higher as the market has had the supportive nature of
an exceptional boxed beef market. But Friday's developments aren't panning out
to be quite that. Instead, the feeder cattle contracts are taking the lead
while the corn market posts mild gains, and consequently, the live cattle
market is rallying in its footsteps. July corn is up 12 cents per bushel, and
July soybean meal is up $9.30. The Dow Jones Industrial Average is up 152.22
points, and the NASDAQ is up 162.66 points.

LIVE CATTLE:

The live cattle contracts are taking Friday's support with caution as the
market rallies close to $1 higher but isn't willing to push the market much
beyond that. June live cattle are up $1.07 at $116.55, August live cattle are
up $0.97 at $119.45 and October live cattle are up $0.80 at $124.30. Even
though the market's got the entire rest of the afternoon to tend to, the market
is seeming all but checked out for the weekend already. Packers have bought the
cattle they're going to buy, the boxed beef market has already made huge leaps
and bounds throughout the week, and now it's just time to let traders trade
until the day's final bell.

Boxed beef prices are mixed: choice down $0.41 ($305.96) and select up $3.04
($292.40) with a movement of 47 loads (27.39 loads of choice, 5.30 loads of
select, 8.17 loads of trim and 6.60 loads of ground beef).

FEEDER CATTLE:

Earlier in the day, the corn market was dancing on both sides of steady,
seeming unsure if the market could pull off another day of higher gains. But,
nevertheless, the complex is back to feeling like its normal self and is
climbing modestly higher. The feeder cattle contracts have found ample support
in Friday's market and are trending anywhere from $1 to $2 higher. And, earlier
in the day, it was closer to $2 to $3 higher. Even with the corn market's
modest rally, the feeder cattle contracts seem fairly confident in their rally,
and unless corn takes a jump for the moon, the feeder cattle contracts may be
able to end the week on a positive note. May feeders are up $2.30 at $132.77,
August feeders are up $2.60 at $146 and September feeders are up $2.17 at
$147.72.

LEAN HOGS:

The nearby contracts are feeling some modest pressure throughout Friday
morning's trade, but largely, the lean hog complex is still trading higher as
the deferred contracts aren't being set back from the same lack of trade
support. June lean hogs are down $1.42 at $113.07, July lean hogs are down
$0.62 at $114.02 and August lean hogs are down $0.57 at $109.35. The cash hog
market is trending lower thus far into Friday's trade. But understanding that
kill schedules are light over the week without having enough hogs to run a full
schedule will obviously mitigate packers' needs at the end of the workweek.

The projected two-day lean hog index for 5/5/2021 is up $0.66 at $108.55,
and the actual index for 5/4/2021 is up $0.52 at $107.89. Hog prices are lower
on the National Direct Morning Hog Report, down $1.47 with a weighted average
of $109.81 ranging from $108.00 to $123.00 on 2,570 head and a five-day rolling
average of $111.46. Pork cutouts total 274.53 loads with 252.12 loads of pork
cuts and 22.41 loads of trim. Pork cutout values: up $3.36, $117.22.

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




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