DTN Midday Livestock Comments 05/09 12:11

DTN Midday Livestock Comments 05/09 12:11 Feeder Cattle Futures Surge Higher Strong gains quickly sweep through the cattle complex as triple-digit gains in the feeder cattle market have led additional buying support into the entire market. Lean hog futures are trending lower with pressure developing on increased market spreading between cattle and hog futures contracts. By John Harrington DTN Livestock Analyst GENERAL COMMENTS: Cattle futures continue to hold strong triple-digit gains as traders focus on the ability to catch up with fundamental support that has developed over the last couple of weeks. Feeder cattle futures are leading the complex higher with a $4 rally in the front-month futurues contract. Corn prices are lower. May corn futures are 5 cents lower. Stock markets are mixed in light trade. The Dow Jones is 42 points lower while Nasdaq is up 21 points. LIVE CATTLE: Strong triple-digit gains are holding through most live cattle futures with front-month June futures leading the complex higher with a $2.60 per cwt rally. Even though the markets have not hit or been locked into limit gains, the focus on the renewed buyer support in order to catch up with cash market interest is helping to spark widespread activity through the entire complex. This may bring additional support through the entire complex, as moderate volume is likely to be seen through the rest of the complex. Cash cattle markets are quiet following higher trade last week. Show lists are mixed to generally smaller with the idea that overall supply tightness is starting to be seen for market ready cattle. The focus on packer trying to get access to cattle as margins have eroded quickly due to the rally in the market over the last couple of weeks could quickly change the tone of the market through the month of May. Beef cut-outs at midday are mixed, $0.14 lower (select) and up $1.62 per cwt (choice) with light movement of 59 total loads reported (19 loads of choice cuts, 18 loads of select cuts, 5 loads of trimmings, 17 loads of ground beef). FEEDER CATTLE: Sharp morning gains are being sustained through the feeder cattle futures as traders continue to focus on the strong push higher in the cash cattle trade last week as well as the potential to draw additional support to the market based on the expectation of tighter supplies over the near future. This has pushed May futures to $4 per cwt gains with all contracts holding aggressive triple-digit gains. LEAN HOGS: Mixed trade seen early in the session Monday has quickly shifted lower as liquidation through the morning has limited any positive potential in the morning. Additional spreading between the cattle and hog market continue to take place as the aggressive gains in the cattle market continue to leave increased pressure on the hog futures with June contracts holding a $1.22 per cwt loss at midday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.26 per cwt to $70.00 per cwt with the range from $65.00 to $72.50 per cwt on 3,286 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 103 loads selling with prices up $1.01 per cwt. Lean hog index for 5/5 is at $74.33, up 0.74 with a projected two-day index of $74.74, up 0.41. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.