DTN Midday Livestock Comments 06/24 11:39
Feeders Trend Lower as Corn Attempts to Regain Some Ground
After trading lower throughout the earlier part of the week, the corn
complex is now trading higher, which has sent feeders trailing lower.
DTN Livestock Analyst
Heading into Friday afternoon, the market is waiting to see what Friday's
Cattle on Feed report reveals. After months of higher on feed numbers largely
driven by drought, there's question as to how on feed numbers can still be this
high as showlists in the North are green, carcass weights are declining and
throughput has been incredibly strong. July corn is up 9 1/2 cents per bushel
and July soybean meal is up $8.30. The Dow Jones Industrial Average is up
What a week it's been for the live cattle market! While the futures market
skates lower thanks to an overall weak commodity market and deliveries driving
some longs out of the market, the cash cattle market stayed true to its sober
realities and saw cattle trade higher despite the board's weakness in the
North. It's easy to get sucked into the emotional roller coaster of the
market's minute-by-minute decision making, but as Northern feedlots keenly
reminded us all, there's power in keeping with the facts and forgoing the
emotion. June live cattle are up $0.20 at $135.45, August live cattle are down
$0.22 at $133.67 and October live cattle are down $0.02 at $139.97. The cash
cattle market hasn't seen any more trade develop and it's likely that the bulk
of the week's business is done with.
Throughout the week, Southern cattle have traded for mostly $138 which is
steady to $2.00 lower than last week. Northern cattle have ranged anywhere from
$230 to $240, mostly at $234 though which is $4.00 higher than last week.
Boxed beef prices are higher: choice up $0.45 ($265.11) and select up $0.19
($245.13) with a movement of 59 loads (30.53 loads of choice, 12.45 loads of
select, 6.86 loads of trim and 9.54 loads of ground beef).
The feeder cattle complex is reacting to a reversal in the corn market's
behavior as the corn market rallies $0.11 to $0.19 higher after trading lower
throughout the week. The uptick in corn prices has sent the feeder cattle
contracts lower and it's likely that the market keeps this trend through
closing as the live cattle market isn't lending much support at this point and
Friday's Cattle on Feed report is expected to be bearish with potentially
record on feed numbers for June 1. August feeders are down $2.27 lower at
$172.57, September feeders are down $1.95 at $174.90 and October feeders are
down $1.82 at $176.80.
After enduring significant losses throughout Thursday's trade, the lean hog
contracts are rallying $1.00 to $2.00 higher as pork cutout values trade higher
into Friday's afternoon and as the cash hog market sees unexpected support come
Friday. July lean hogs are up $2.15 at $110.70, August lean hogs are up $2.87
at $106.55 and October lean hogs are up $1.97 at $92.22. It's likely that
Friday's market will close within Thursday's parameters, leaving next week the
task of determining what's next. It's likely that the market doesn't make any
more significant moves ahead of next week's Quarterly Hogs and Pigs report as
the market yearns for reassurance.
The projected lean hog index for June 23 is up $0.23 at $110.90 and the
actual index for June 22 is down $0.07 at $110.67. Hog prices are higher on the
Daily Direct Morning Hog Report, up $1.32 with a weighted average of $119.93,
ranging from $112.00 to $125.50 on 6,771 head and a five-day rolling averaged
of $117.42. Pork cutouts total 171.57 loads with 152.28 loads of pork cuts and
19.29 loads of trim. Pork cutout values: up $3.21, $112.98.
ShayLe Stewart can be reached email@example.com
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