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DTN Midday Livestock Comments          06/18 11:39

   Live Cattle, Lean Hogs Looking to Regain Positioning

   The entire livestock sector would be trading higher if the feeder cattle 
complex wasn't being pressured by the corn market. Just the live cattle and 
lean hog contracts are rallying into Friday afternoon. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   After Thursday's bearish afternoon close, the live cattle and lean hog 
contracts have jumped to Friday's arrival and are looking to resecure some of 
the position that Thursday gave up. The feeder cattle contracts are back to 
bowing down to the corn market, though, as corn prices are anywhere from $0.18 
to $0.32 higher. July corn is up 19 cents per bushel and July soybean meal is 
up $10.50. The Dow Jones Industrial Average is down 403.77 points and NASDAQ is 
down 81.80 points.

   LIVE CATTLE:

   Attempting to regain some of what the market threw away in Thursday's 
sell-off, the live cattle contracts are trading well over $1.00 higher 
throughout the entire complex. June live cattle are up $1.70 at $121.80, August 
live cattle are up $1.37 at $122.47 and October live cattle are up $1.20 at 
$127.77. Even though Thursday's sell-off was disappointing, looking at the week 
the live cattle market and the cash cattle market have had is rather 
impressive. If Friday's slaughter can come in at a sizeable level and if 
packers can run a fast Saturday kill, this week will also be gunning for an 
impressive slaughter somewhere around 660,000 head, depending on how Friday and 
Saturday shake out. I know it can be tempting to see lower boxed beef prices 
and think the market is subpar. But a seasonal high was fully anticipated and 
the market's current boxed beef prices are still allowing packers to make 
healthy profits. It's looking like the week's cash cattle trade is done with as 
there haven't been any bids renewed.

   Boxed beef prices are lower: choice down $0.78 ($325.47) and select down 
$1.59 ($285.65) with a movement of 58 loads (32.97 loads of choice, 12.88 loads 
of select, 5.71 loads of trim and 6.28 loads of ground beef).

   FEEDER CATTLE:

   Simply put, the feeder cattle contracts are cussing the corn market as they 
thoroughly enjoyed rallying throughout the earlier part of the week when corn 
was dogging lower. Thankfully the market's weaker demeanor comes after the 
nation's first big test of feeder cattle prices for the year. If you didn't get 
a chance to watch Superior's Corn Belt Classic on Thursday, the market was hot 
as buyers came charged and ready to buy cattle and program cattle (NHTC, 
verified natural and GAP 4) especially saw exceptional demand. August feeders 
are down $0.25 at $157.15, September feeders are down $0.57 at $158.52 and 
October feeders are down $0.77 at $159.92.

   LEAN HOGS:

   The lean hog complex is somewhat licking its wounds after this last week and 
attempting to regain some lost positioning before the week's end. July lean 
hogs are down $0.30 at $110.70, August lean hogs are up $0.95 at $108.17 and 
October lean hogs are up $1.92 at $88.85. The market sees more and more support 
from the October 2021 contract on out into the deferred months, where the 
market hopes to find more stability. The cash hog market is lower Friday 
morning which doesn't come as an unsettling surprise given how aggressive 
packers were earlier in the week. Heading into the weeks to come, even though 
supplies are thin, packers may be a little more cautious of the market until 
they see some of the week's demand and performance.

   The projected CME Lean Hog Index for 6/17/2021 is down $1.30 at $120.38 and 
the actual index for 6/16/2021 is down $0.91 at $121.68. Hog prices are lower 
on the National Direct Afternoon Hog Report, down $3.26 with a weighted average 
of $116.04, ranging from $113.00 to $134.00 on 2,445 head and a five-day 
rolling average of $118.50. Pork cutouts total 192.40 loads with 170.29 loads 
of pork cuts and 22.12 loads of trim. Pork cutout values: up $2.75, $127.58.

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




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