DTN Midday Livestock Comments 05/06 12:16

DTN Midday Livestock Comments 05/06 12:16 Spot June Live Leads Midday Cattle Rally The cattle complex at midday is higher in the live market and mixed in the feeder trade. Conversely, lean hog futures are under pressure tied to sharply lower carcass value and late-week long liquidation. By John Harrington DTN Livestock Analyst GENERAL COMMENTS: The cash cattle market near midday remains untested with preliminary bids and asking prices separated by several country miles. A few bids have been report at $118-119 in the South and $190-195 in the North. On the other hand, asking prices (obviously firmed by the ongoing recovery of spot June live) are around $127 plus in the South and $200 in the North. It's possible that significant trade volume will be delayed until late this afternoon. According to the midday report, the national hog base is $1.12 lower compared with the Prior Day settlement ($67.00-72.00, weighted average $69.87). The corn market is currently 3-4 cents higher, bolstered by spillover buying from the bean trade and late week short covering. Equities are trading mostly lower after the April nonfarm payrolls report missed expectations. Near the top of the noon hour, the Dow is off 13 points with the Nasdaq softer by 20. LIVE CATTLE: While live contracts are mostly higher in late morning action, the bulk of late week buying interest is clearly focused on spot June. The lead month has pushed over 120 for the first time since April, powered by bull spreading, pre-cash profit taking, and technical buying. So far, June has successfully recovered from several waves of selling through the morning. Yet all will be interested to see how the spot holds the high ground through the close. Beef cut-outs are moderately lower at midday, off 0.59 (select, $194.91) to 0.76 (choice, $203.66) with light box movement (28 loads of choice cuts, 33 loads of select cuts, 12 loads of trimmings, 16 loads of coarse grinds). FEEDER CATTLE: Feeders opened impressively along with live counterparts, but soon turned mixed and that's how prices are playing near midday. The uneven action seems linked to profit taking, concerns about the corn market, and the ultimate success of live futures. LEAN HOGS: Lean futures have traded lower through the morning thanks to late week long liquidation and profit taking. Yet selling interest seemed to increase (especially in the June contract) when the noon carlot dropped with surprising news. The carcass value at midday is shockingly soft, hammered by a $23.81 implosion of the belly primal. Pork cut-out: $78.73, off $4.39. CME cash lean for 05/04: 73.59, up .95 (DTN Projected lean index for 05/05: 74.33, up 0.74). John A. Harrington can be reached at john.harrington@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.