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DTN Midday Livestock Comments          05/17 13:52

   Livestock Contracts Trade Meekly Into Monday's Trade

   The livestock complex hasn't roared into Monday's trade after tending to 
last week's wounds over the weekend. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The livestock complex has been slow to start Monday morning with the market 
not sure where its fate lies. The lean hog market is looking to the market's 
fundamentals to shine light and support that demand is still exceptional and 
that consumers are still yearning for more product. The cattle contracts are 
leery of what the corn market may do and are trading cautiously until more 
stability is found. July corn is up 3 1/2 cents per bushel and July soybean 
meal is down $2.00. The Dow Jones Industrial Average is down 129.55 points and 
NASDAQ is down 124.23 points.

   LIVE CATTLE

   The live cattle market's pressure continues to send most of the contracts 
lower heading into Monday's afternoon. June live cattle are down $0.17 at 
$115.17, August live cattle are down $0.20 at $118.65 and October live cattle 
are up $0.30 $123.52. The discrepancy between the futures market, cash cattle 
prices and boxed beef prices continues to be mind boggling. Looking at the week 
ahead, the cash cattle market has its work cut out for itself. With boxed beef 
prices expected to make a season top here in the next week or two, it's only a 
matter of when packers start to work the cash cattle market lower again. New 
showlists appear to be mixed, higher in Kansas, somewhat lower in 
Nebraska/Colorado, but lower in Texas.

   Last week's negotiated cash cattle movement totaled 68,950 head. Of that 74% 
(50,690 head) were purchased for the nearby delivery, while the remaining 26% 
(18,260 head) were purchased for the deferred delivery in the next 15 to 30 
days.

   Boxed beef prices are higher: choice up $2.10 ($319.04) and select up $4.17 
($297.36) with a movement of 36 loads (16.51 loads of choice, 4.74 loads of 
select, 6.37 loads of trim and 8.21 loads of ground beef).

   FEEDER CATTLE

   With the corn market posing a mostly lower trajectory for the day, the 
feeder cattle contracts are cautiously trading higher. It's hard to trade 
wildly higher when the live cattle market is skeptical and the corn contracts 
could turn higher with a blink of an eye, but thankfully, with some much-needed 
moisture, feeder cattle buyers were testing last week's market again and the 
futures complex is dying to trade higher. May feeders are down $0.35 at 
$137.20, August feeders are up $0.70 at $151.85 and September feeders are up 
$0.70 at $153.37. The feeder cattle market will continue to be subject to harsh 
price movements as both the corn and live cattle/cash cattle markets trade on 
shaky ground.

   LEAN HOGS

   Hold on, simmer down, and remember that we can't put too much faith into the 
morning's pork cutout value. Before determining whether prices are truly higher 
or lower, it's essential that we see how the day concludes. With the futures 
market scaling steadily lower, cash hog prices trailing lower and yet the 
morning's pork cutout prices being up a staggering $10 -- the market has some 
business to iron out. It wouldn't be surprising to see the day's afternoon pork 
cutout value close higher given that packers ran slower processing speeds last 
week but closing $10.00 higher seems a little steep. Thankfully, time will 
tell, and if the market does hold its vast $10.00 advancement, that may be 
enough to encourage traders to trade higher yet again. June lean hogs are down 
$0.22 at $108.50, July lean hogs are down $0.40 at $108.60 and August lean hogs 
are up $0.25 at $105.02.

   The projected lean hog index for May 13 is down $0.01 at $110.93 and the 
actual index for May 12is down $0.01 at $110.94. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.47 with a weighted average of 
$107.64, ranging from $103.00 to $119.00 on 4,236 head and a five-day rolling 
average of $110.17. Pork cutouts total 137.89 loads with 121.82 loads of pork 
cuts and 16.08 loads of trim. Pork cutout values: up 10.08, $125.78.

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




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