DTN Midday Livestock Comments          05/26 11:28

   Live Cattle Press Onward While Feeders Pause Because of Corn

   Higher corn prices have rocked the feeder cattle contracts back on their 
heels as traders can't overlook the $0.12 to $0.15 rally taking place right now 
in the corn sector.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   It's a mixed marketplace for the livestock sector as the live cattle market 
continues to charge onward and forward, but both the lean hog and feeder cattle 
markets trading lower. Higher corn prices are keeping the feeder cattle 
contracts from rallying alongside the live cattle market. July corn is up 15 
cents per bushel and July soybean meal is up $7.60. The Dow Jones Industrial 
Average is up 294.82 points.

LIVE CATTLE:

   It's yet another rallying, powerful day for the live cattle complex as not 
only are all the contracts trading higher, but the June, August and October 
2023 contracts are all currently trading at new contract highs. Again, the main 
driver of the market's tremendous success this week is the onset of higher cash 
cattle prices. Early in the week, traders were reluctant to do much of anything 
in the market ahead of seeing what cash cattle trade would amount to, but when 
prices launched $1.00 to $5.00 higher, traders reacted. The other positive 
component to Friday's market is the fact that boxed beef prices are higher. 
Seeing seasonal pressure is expected around the Memorial Day holiday, and 
prices have regressed as of late, but the higher note come Friday morning is 
sitting well with traders. Heading into Friday afternoon, higher corn prices 
could put a damper on the market's positive tone, but then again, traders could 
just elected to focus on the positives of this week's trade and let next week's 
market discern how corn prices should affect the live cattle market. No new 
cash cattle trade has been reported, and at this time is looking like the 
week's business is essentially done with. June live cattle are up $0.17 at 
$167.45, August live cattle are up $0.07 at $164.82 and October live cattle are 
up $0.45 at $169.50.

   Throughout the week, Southern live cattle have traded for mostly $171, which 
is steady in Kansas but $1.00 higher in Texas, and Northern dressed cattle have 
traded for mostly $285 to $286, which is $4.00 to $5.00 higher than last week's 
weighted average.

   Boxed beef prices are higher: choice up $3.95 ($303.89) and select up $0.21 
($284.75) with a movement of 62 loads (42.37 loads of choice, 9.39 loads of 
select, 4.69 loads of trim and 5.96 loads of ground beef).

FEEDER CATTLE:

   The feeder cattle market would love to continue to trade higher along side 
the rallying live cattle complex, but the corn market's $0.14 to $0.16 rally 
has stopped the feeder rally dead in its tracks. August feeders are down $0.82 
at $233.87, September feeders are down $1.05 at $237.02 and October feeders are 
down $1.12 at $238.92. looking past a minor $0.01 to $0.05 rally is one thing, 
but when corn prices are rallying as aggressively as they are, feeder cattle 
market traders want to gain a better understanding of the market's trajectory 
before they do much of anything else. With the new corn crop still subject to 
any and all weather influences, corn prices can swing dramatically during this 
time of year.

LEAN HOGS:

   It's another grim and dreary day for the lean hog complex as prices continue 
to flounder lower. June lean hogs are down $0.90 at $76.75, July lean hogs are 
down $1.47 at $75.72 and August lean hogs are down $1.92 at $75.02. Pork cutout 
values may be up slightly, but we know that anything could happen to the 
afternoon's carcass price, and that, even if afternoon pork cutout values do 
close higher, it still won't likely be know support to encourage traders. Until 
the futures complex establishes some sort of a bottom in this market, continued 
dramatic downward pressure is likely.

   The projected lean hog index for May 25 is down $0.32 at $80.48, and the 
actual index for May 24 is up $0.13 at $80.80. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $3.63 with a weighted average price of 
$75.36, ranging from $74.00 to $87.00 on 3,940 head and a five-day rolling 
average of $77.65. Pork cutouts total 107.80 loads with 94.65 loads of pork 
cuts and 13.15 loads of trim. Pork cutout values: up $2.54, $83.73.

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




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