DTN Midday Livestock Comments 06/01 12:19
Cattle Contracts Mixed at Midday Monday; Lean Hogs Solidly Lower
Monday welcomes a new week and livestock contracts are showing more support
as the day progresses.
DTN Livestock Analyst
As Monday rounds the halfway mark, cattle contracts are building some
support, while lean hog contracts near $2.00 losses. Feeder cattle futures are
rallying support in nearby contracts while the live cattle futures are more
confident in the deferred issues. Dancing around the unknowns of live cattle
circumstances, working through the backlog of cattle, wondering how cash cattle
prices will hold and dwindling boxed beef prices all make perfect sense as to
why the live cattle market is more tentative about rallying around nearby
contracts. July corn is down 1 1/2 cents per bushel and July soybean meal is up
$0.50. The Dow Jones Industrial Average is up 68.26 points and NASDAQ is up
Live cattle contracts have some nearby resistance that is both technical and
industry driven. Once June and August fight resistance at $100. Knowing that
cash cattle prices have to weaken in the near future, nearby contracts are
reluctant to trade higher. How aggressive will packers be in their cash cattle
acquisition this week? What will slaughter capacity look like? And are boxed
beef prices going to tumble lower throughout the week, or merely stairstep back
to normal ranges? June live cattle are down $1.17 at $98.55, August live cattle
are down $0.47 at $99.15 and October live cattle are up $0.12 at $101.55.
New showlists appear to be higher in all major feeding areas, especially in
Boxed beef prices are lower: choice down $13.03 ($350.31) and select down
$10.40 ($329.67) with a movement of 68 loads (41.20 loads of choice, 9.16 loads
of select, 3.97 loads of trim and 13.85 loads of ground beef).
Feeder cattle contracts are starting to come around to the idea of trading
higher in nearby months. August feeders are up $0.85 at $136.20, September
feeders are up $1.15 at $136.90 and October feeders are up $1.35 at $137.37.
It's interesting to compare prices of years past to this year's market, and
despite the havoc that 2020 has brought, feeder cattle prices are just $1.00
lower than they were at this time a year ago. On June 3, 2019, the first Monday
of the month, feeder cattle contracts were at $137.45.
Lean hog contracts continue to drift lower as Monday progresses and the
industry seems to have no incentive for the market to trade higher. June lean
hogs are down $2.22 at $54.62, July lean hogs are down $1.87 at $55.15 and
August lean hogs are down $1.60 at $55.12. Despite typing time and time (and
time and time) again that cutout values are lower and cash prices are down, as
the market continues to work through the backlog of hogs it is one day closer
to being current and being able to rally prices and find new price discovery
The projected lean hog index for 5/29/2020 is down $1.29 with a weighted
average of $59.96, and the actual index for 5/28/2020 is down $1.70 at $61.25.
Hog prices are down on the National Direct Morning Hog Report, down $1.69 with
a weighted average of $35.23, ranging from $31.00 to $38.00 on 3,979 head and a
five-day rolling average of $36.07. Pork cutouts total 177.41 loads with 165.21
loads of pork cuts and 12.20 loads of trim. Pork cutout values: down $4.87,
ShayLe Stewart can be reached firstname.lastname@example.org
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