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DTN Midday Livestock Comments 05/27 11:47

05/27/2022


DTN Midday Livestock Comments 05/27 11:47

Time Ticks Slowly Ahead of the Long Weekend for the Livestock Complex

It's been a lackadaisical day for the livestock complex as the markets are
uneventfully thus far Friday.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

Largely, it's an uneventful day, as the livestock market longs for the
weekend ahead. Trade will likely continue to roll throughout Friday afternoon
and pick up dynamically come next week. July corn is up 13 1/4 cents per bushel
and July soybean meal is up $4.90. The Dow Jones Industrial Average is up
357.57 points.

LIVE CATTLE:

The nearby live cattle contracts are keeping with their descend, while the
deferred months see a little profit taking. June live cattle are down $0.20 at
$132.20, August live cattle are down $0.37 at $132.22 and October live cattle
are down $0.12 at $138.05. Given how much of the market's premium has eroded in
the deferred months, any little victory for the back months will be warmly
welcomed as, fundamentally speaking, the market should garnish higher prices as
supplies of market-ready cattle will thinner then. Friday's cash cattle market
hasn't seen an ounce of interest as the week's business is appearing to be done
with. We know that this week's volume will be considerably thinner than weeks
past, as packers have opted to pull on their supplies of cattle committed to
them via deferred delivery instead of supporting the cash market. Throughout
the week, Southern live cattle have traded for $137 ($1.00 lower) and Northern
dressed cattle traded for $223 ($3.00 lower than last week).

Boxed beef prices are higher: choice up $0.96 ($264.93) and select up $2.26
($246.69) with a movement of 68 loads (28.68 loads of choice, 6.14 loads of
select, 5.10 loads of trim and 27.91 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts are keeping with their descend as the market
retracts thanks to Friday's rally in the corn market. With the corn complex
rallying $0.11 to $0.12, and with the live cattle contracts aiding no
substantial support in their nearby contracts and showing less and less
confidence in the deferred months as the day trades on -- it's likely that
Friday closes on a lower note for the feeder cattle market. August feeders are
down $0.65 at $166.02, September feeders are down $0.60 at $169.12 and October
feeders are down $0.85 at $171.70.

LEAN HOGS:

After rallying aggressively through Thursday's trade, the nearby lean hog
contracts are trading lower while the deferred months add to their position.
June lean hogs are down $0.85 at $110.25, July lean hogs are down $0.12 at
$111.70 and August lean hogs are down $0.12 at $110.00. Given how bold and
aggressive the market was earlier in the week, it's likely that the market
drifts through the day not doing much and lets next week decide where the
market shall go. Monitoring pork demand after the Memorial Day weekend will be
key as it will strongly influence the market's nearby trajectory. Before
heading into the long weekend, it is important to note that Germany has
confirmed that a domestic pig farm near the French border has been confirmed to
have African swine fever.

The projected lean hog index for May 26 is up $0.52 at $104.93, and the
actual index for May 25 is up $0.52 at $104.40. Hog prices are lower on the
Daily Direct Morning Hog Report, down $2.80 with a weighed average of $108.54,
ranging from $107.50 to $116.50 on 3,591 head and a five-day rolling average of
$111.08. Pork cutouts total 182.08 loads with 162.82 loads of pork cuts and
19.27 loads of trim. Pork cutout values: up $0.39, $108.52.

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




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