DTN Midday Livestock Comments 05/16 11:59

DTN Midday Livestock Comments 05/16 11:59 Triple-Digit Gains Hold in Cattle Futures Aggressive gains hold in feeder cattle futures Monday morning. This is sparking follow-through buyer support in both live cattle and lean hog markets through the morning. By Rick Kment DTN Analyst GENERAL COMMENTS: Aggressive triple-digit gains quickly sparked additional buyer support moving into the entire complex as $2 to $3 per cwt gains held through most of the morning in the feeder cattle market. This helped to push most live cattle futures contracts higher during morning trade. The combination of strong cash cattle trade last week and lack of support in the grain complex this week is limiting trade buyer interest fueling follow-through buyer support. Corn prices are lower. May corn futures are 1 cent lower. Stock markets are higher in light trade. The Dow Jones is 142 points higher while Nasdaq is up 48 points. LIVE CATTLE: Spot month June contracts continue to hold a 37 cent loss Monday morning as traders continue to roll out of the June contracts and into the August and October futures contracts. The remainder of the futures contracts remain firmly higher with 70 cent to $1.50 per cwt gains seen across the complex. The aggressive market support seen in feeder cattle markets continue to hold the live cattle futures higher through the morning, especially in deferred contracts. Cash cattle activity is quiet following the moderate to active cash business that developed Thursday and then trickled into the market through clean-up activity on Friday with prices $10 higher in the North and generally $7 higher in the South. The focus on continuing the price advancement ahead of the Memorial Day holiday demand should spark increased aggressiveness by traders through the next week. Active trade is not expected until Thursday or Friday. Beef cut-outs at midday are higher, $2.30 higher (select) and up $3.43 per cwt (choice) with light movement of 40 total loads reported (24 loads of choice cuts, 9 loads of select cuts, no loads of trimmings, 7 loads of ground beef). FEEDER CATTLE: Sharp gains continue to hold through the entire feeder cattle futures with triple-digit gains quickly jumping into the market once markets opened Monday morning as $2 to $3 per cwt gains being sustained during the morning. May futures are holding at $1.95 per cwt higher at midday while August through October futures are holding from $2.55 to $2.70 per cwt based on the combination of firm cash market support over the past two weeks and the recent softness in grain markets limiting overall feed costs. Even though front month feeder cattle futures is still holding below $150 per cwt, the potential to draw some additional commercial interest over the next three weeks could help to firm buyer support over the entire complex. LEAN HOGS: Gains continue to trickle into the complex with June futures holding a 60 cent gain at midday. The aggressive support seen through the cattle market continues to draw support through the entire livestock market Monday. The previous trend of spreading hog and cattle contracts against each other seem to have broken out of that trend Monday morning as the entire livestock complex is drawing buyer support based on moderate grain market pressure and short covering activity following last week's pressure and the fundamental support developing in the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.02 per cwt to $73.50 per cwt with the range from $68.00 to $73.50 per cwt on 3,671 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The weighted average price fell $1.20 per cwt to $74.52 per cwt with the range from $71.00 to $74.52 per cwt on 235 head reported sold. The National Pork Plant Report reported 176 loads selling with prices up $0.86 per cwt. Lean hog index for 5/12 is at $76.43, up 0.38 with a projected two-day index of $76.72, up 0.29. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.