DTN Midday Livestock Comments 06/05 11:36

DTN Midday Livestock Comments          06/05 11:36

   Cheaper Corn Pushes Cattle Higher Midday Monday

   With corn prices lower again Monday, both the live cattle and feeder cattle 
markets are trading fully higher to start the week. 

ShayLe Stewart
DTN Livestock Analyst


   Both the live cattle and feeder cattle contracts are rallying into Monday's 
noon hour, but the lean hog market is trading mixed as its own market is torn 
on what direction it should trade. Either way, with corn prices trading lower 
thus far, cattlemen are eager at the opportunity that could loom if feed prices 
continue to dwindle. July corn is down 12 1/2 cents per bushel and July soybean 
meal is up $0.20. The Dow Jones Industrial Average is down 60.97 points.


   The live cattle complex is running into Monday's market with the same 
vigorous attitude that it possessed last week. It's helping matters that boxed 
beef prices are continuing to see tremendous support, which consequently keeps 
packers engaged in the cash market. It's too early to tell what cash cattle 
prices will do this week, but feedlots are seeming to grow stronger in their 
quest for more market leverage and are understanding that, if they want higher 
prices, they have to market their cattle accordingly. June live cattle are up 
$0.92 at $177.35, August live cattle are up $0.60 at $173.50 and October live 
cattle are up $0.35 at $176.35.

   Boxed beef prices are higher: choice up $3.76 ($313.69) and select up $5.16 
($296.09) with a movement of 55 loads (25.58 loads of choice, 10.03 loads of 
select, 8.14 loads of trim and 11.11 loads of ground beef).


   The feeder cattle contracts are having no issue trading higher as the corn 
complex trades $0.03 to $0.10 lower into Monday's noon hour. With many of the 
Western Mountain states getting moisture over the last couple of weeks, the 
sentiment throughout the feeder cattle market has been extremely strong as 
ranchers are seeing some range/grassland improvement and as the interest in 
feeders continues to be extremely high throughout the countryside. With the 
live cattle market's support, the only hindering factor that the feeder cattle 
market must closely watch is corn prices, and, thus far Monday, they're trading 
lower. August feeders are up $0.70 at $242.60, September feeders are up $0.62 
at $245.62 and October feeders are up $0.57 at $247.57.


   The lean hog complex has grown stronger as the day has traded on, but the 
nearby contracts are still struggling with the deferred contracts trade 
slightly higher. June lean hogs are down $0.97 at $85.72, July lean hogs are 
down $0.22 at $84.42 and August lean hogs are down $0.52 at $81.77. The entire 
lean hog complex is a mixed marketplace Monday morning as pork cutout values 
are sharply higher, but cash prices are still trading slightly lower. Once 
again, the wild nature of Monday's midday carcass price is being thrown out of 
whack by a $36.33 rally in the belly, and by a $10.01 rally in the ham. Be on 
the look out for afternoon cutout prices because anything could be in the cards.

   The projected lean hog index for June 2 is up $0.69 at $81.21, and the 
actual index for June 1 is up $0.89 at $80.52. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $1.07 with a weighted average price of 
$80.30, ranging from $80.00 to $89.00 on 3,490 head and a five-day rolling 
average of $81.90. Pork cutouts total 154.30 loads with 138.20 loads of pork 
cuts and 16.10 loads of trim. Pork cutout values: up $8.06, $92.78.

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

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