DTN Midday Livestock Comments 05/25 11:28

DTN Midday Livestock Comments 05/25 11:28 Midweek Point Brings Ample Support to Livestock Contracts The cash cattle market has yet to see any trade develop for the day, and given that only a small handful of cattle traded Tuesday afternoon, the market needs to see some business get underway. ShayLe Stewart DTN Livestock Analyst GENERAL COMMENTS: Thus far, it's been a rather supportive and encouraging day for the livestock sector. The live cattle and feeder cattle contracts are trading higher, as the corn market works its way lower, and feedlots are anxiously sitting around waiting for a bid. Meanwhile, the nearby lean hog contracts are trading higher as the market found support Tuesday afternoon with a higher cash market and stronger pork cutout values. July corn is down 7 1/2 cents per bushel and July soybean meal is down $6.40. The Dow Jones Industrial Average is up 47.33 points. LIVE CATTLE: The live cattle contracts are again trading higher as the market finds ample technical support and likes to see that processing speeds are keeping with their vigorous pace, and that boxed beef demand has grown firmer. June live cattle are up $0.20 at $132.92, August live cattle are up $0.12 at $132.87 and October feeder cattle are up $0.05 at $138.67. Given that the market is far from resistance, its upward potential isn't limited so long as the fundamental side of the market holds somewhat steady. The country saw a little bit of business develop Tuesday afternoon but largely the market has still yet to trade for the week. Asking prices for the day are noted at $138-plus in the South and $226-plus in the North, and bids of $222 to $224 are being offered in Nebraska but otherwise the market is quiet. Boxed beef prices are mixed: choice down $0.35 ($263.30) and select up $0.29 ($245.64) with a movement of 54 loads (35.65 loads of choice, 10.41 loads of select, zero loads of trim and 7.49 loads of ground beef). FEEDER CATTLE: As the corn market continues to cascade lower, the feeder cattle contracts are pushing a modest rally as the day finds support from weaker inputs and modest support from the live cattle market. August feeders are up $0.50 at $168.70, September feeders are up $0.55 at $171.62 and October feeders are up $0.80 at $174.27. So much of the feeder cattle market's outcome depends on the corn market right now. Yes, the country needs rain, yes, the market needs to see strong consumer demand, but with cost of gains already historically high -- feeder cattle buyers are glued to the corn market as it dictates what they can afford to pay for feeders. Given that early summer sales are about to begin in a month, everyone is scrambling to get a gauge on what feeder cattle prices could be this year. LEAN HOGS: After rounding out lower Tuesday afternoon, the nearby lean hog contracts are back to rallying modestly while the deferred months aren't so optimistic. June lean hogs are up $0.40 at $109.42, July lean hogs are up $0.27 at $109.30 and August lean hogs are up $0.07 at $109.10. The hog market is relying on unanimous support in order to keep its market trending higher. So, on Monday afternoon, when pork cutout values closed lower and cash prices saw little interest, Tuesday's market was cautious as it needed to see better support. Thankfully, by Tuesday's end, the market was again supported by the cash market and by pork cutout values. Come Wednesday, traders are back to working the front months higher. Much of Thursday's outcome will depend on how trade handles itself this afternoon. The projected lean hog index for May 24 is up $0.84 at $103.88, and the actual index for May 23 is up $0.96 at $103.04. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.57 with a weighted average of $111.96, ranging from $100.00 to $116.50 on 7,414 head and a five-day rolling average of $111.48. Pork cutouts total 141.83 loads with 132.25 loads of pork cuts and 9.58 loads of trim. Pork cutout values: down $1.06, $107.18. ShayLe Stewart can be reached shayle.stewart@dtn.com (c) Copyright 2022 DTN, LLC. All rights reserved.