DTN Livestock Midday: Narrow Price Ranges Holding

©Debra L Ferguson Stock Photography

Limited activity is seen Thursday morning with light volume seen through the entire complex. Prices have backed away from early morning live cattle gains.

General Comments

Strong early support in live cattle and feeder cattle markets have backed away with increased trade interest holding through the complex.

Corn futures are lower in moderate trade. July corn futures are 3 cents lower. Stock markets are lower in light trade. Dow Jones is 96 points lower with Nasdaq down 33 points.

LIVE CATTLE:

Light buying continues at midday in nearby contracts following strong underlying support from the cold storage report, and export sales report which posted increased exports for the week.

Traders are looking for increased short- and long-term demand, even though the upcoming cattle on feed report may post record numbers of cattle on feedyards. This may bring some additional volatility through the complex going into the long holiday weekend as well as next week.

Cash cattle interest is sluggish Thursday morning with light to moderate live cattle sales seen in the north at $116 per cwt. This is $1 per cwt lower than last week’s live prices in the North. Bids are seen in all other areas in the same range as Wednesday.

Boxed Beef cut-outs at midday are higher, $0.86 higher (select) and up $0.76 per cwt (choice) with light movement of 73 total loads reported (37 loads of choice cuts, 14 loads of select cuts, 4 loads of trimmings, 18 loads of ground beef).

FEEDER CATTLE:

Initial gains in feeder cattle trade have slowly eroded through the morning with traders holding a mixed trading range from 20 cents lower to 15 cents higher. Strong export sales gains for beef has sparked additional support through the complex with May and August futures holding a 10 to 15 cent gain as very limited movement is seen in live cattle trade.

The underlying concern surrounding aggressive cattle on feed report expectations which will continue to limit market support over the next couple of weeks.

LEAN HOGS:

Lean hog futures are mixed in limited activity with June futures holding a narrow 5 cent loss, while other 2019 contracts are holding gains of 10 to 30 cents per cwt. The focus on a strong export sale to China in the mornings export sales report has offset early sharp losses in the market as traders back away from the concern of eroding demand and move more to the short term potential for growth in the complex.

Limited pressure is still seen in deferred contracts, although limited movement is expected through the end of the session based on current price levels, and recent market pressure limiting overall long term support through the complex.

Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $1.11 at $80.33 per cwt with the range from $72.00 to $83.00 on 7,761 head reported sold.

Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $1.75 at $81.26 per cwt with the range from $78.00 to $83.00 on 5,341 head reported sold.

Pork values firmed Thursday with mixed triple-digit ranges seen in the complex. Pork cutouts added $0.28 per cwt at $85.11 per cwt with 149 loads traded. Lean hog index for 5/21 is $84.39, up 0.02, with a projected two-day index at $84.36, down 0.03.

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