DTN Livestock Midday: Traders Find Interest in Contracts

©Debra L Ferguson Stock Photography

The entire livestock complex is rallying into Tuesday’s afternoon trade as traders have bolstered the marketplace into a fine rally.

GENERAL COMMENTS:

The livestock contracts are doting over the support the market’s seen since midmorning and are rallying while the opportunity lasts. The live cattle and feeder cattle contracts have seen recent interest and support from traders, but surprisingly enough, even the depressed lean hog market is drawing traders’ attention.

July corn is up 2 3/4 cents per bushel, and July soybean meal is down $6.60. The Dow Jones Industrial Average is up 27.41 points, and the NASDAQ is up 68.48 points.

LIVE CATTLE:

As if the technical rally throughout the live cattle contracts wasn’t sweet enough, the cash cattle market is now seeing bids of $126 to $126.50 develop in Nebraska, which is $2 higher than the top end of last week’s trade. There were a few that traded for $126 Monday afternoon, but not enough to say that the market was really tested.

Traders are rallying the nearby live cattle contracts aggressively, while the deferred contracts have caught their interest but not on the same scale. June live cattle are up $3.12 at $124.10, August live cattle are up $3.27 at $124.30 and October live cattle are up $2.37 at $129.02.

Thus far, there’s not been any takers on Tuesday for the market’s bid of $126 in Nebraska, and as feedlots look at the week, they could be thinking that if packers are that willing to throw cash at cattle now, imagine what their bids could be, come late Wednesday or even Thursday, if the whole market held out.

Asking prices in the South are pinned at $124 plus, and the North has yet to state what they are hoping to get out of cattle this week.

FEEDER CATTLE:

The nearby August feeder cattle contract comes up against the resistance at $158 and continues to hold. The market would love nothing more than for the corn complex to continue to trade lower and for the market to blow past any resistance. But if that’s going to become a reality, the market will need to see support not only from a technical standpoint but also from the countryside.

Buyers were more aggressive last week in the nation’s feeder cattle sales than expected, and it’s likely that if the board holds steady or even continues to show favorable, modest rallies, that their buying aggression could continue. August feeders are up $2.90 at $158, September feeders are up $2.45 at $159.82 and October feeders are up $2.05 at $161.37.

LEAN HOGS:

Traders haven’t seen the lean hog market trade lower like it has since the first of June in a long, long time. The market’s regression and the want to invest has largely taken Tuesday’s market by storm as traders are modestly supporting the lean hog complex while hype over the livestock contracts is intriguing.

July lean hogs are up $1.35 at $108.40, August lean hogs are up $1.57 at $105.25 and October lean hogs are up $1.17 at $86.62. The market’s fundamentals haven’t necessarily ripened as the midday pork cutout values are weaker, so Tuesday’s higher trade throughout the lean hog market is somewhat spillover from the cattle market’s rally.

The projected lean hog index for 6/21/2021 is up $0.06 at $120.69, and the actual index for 6/18/2021 is up $0.25 at $120.63. Hog prices are higher on the National Direct Morning Hog Report, up $0.86 with a weighted average of $120.34, ranging from $114 to $137.50 on 3,775 head and a five-day rolling average of $119.87. Pork cutouts total 248.51 loads with 215.46 loads of pork cuts and 33.05 loads of trim. Pork cutout values: down $1.52, $119.24.

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