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DTN Midday Livestock Comments          05/05 11:43

   Steady Corn Market Allows Cattle to Rally Modestly

   With the corn complex holding mostly steady, the cattle contracts have been 
granted the chance to trade slightly higher after Tuesday's sharply lower close.

ShayLe Stewart
DTN Livestock Analyst


   This week's trade hasn't been for the lackadaisical as the week's 
developments have been quick to change and in drastic measures. Following 
Tuesday's sharply lower close in both the live cattle and feeder cattle 
contracts, Wednesday has lent the cattle complex some opportunity to regain 
part of its lost position as the corn market trades mostly steady. July corn is 
up 2 cents per bushel, and July soybean meal is up $4.10. The Dow Jones 
Industrial Average is up 132.70 points, and NASDAQ is up 72.29 points.


   It's too bad that the fat cattle market has already seen a moderate movement 
as boxed beef prices keep scaling higher and theoretically speaking cash cattle 
should be worth more as well. June live cattle are up $0.97 at $114, August 
live cattle are up $0.87 at $117.50, and October live cattle are up $1.07 at 
$122.82. The minor break in the corn market's rally has eased some of the 
pressure looming above the cattle contracts and is allowing for slightly higher 
trade throughout Wednesday. For the rest of the cattle that are to sell this 
week, their odds of demanding higher prices is slim as packers have already 
procured a moderate movement this week at steady prices in the North, and 
steady to $1 higher in the South; and we can't forget to mention that packers 
have forward bought cattle for this time, so their need to rely solely on the 
cash market is lessened.

   The Fed Cattle Exchange Auction listed a total of 2,153 head, of which 1,091 
actually sold, 202 head were scratched from the auction, and 860 head were 
listed as unsold, as they did not meet the reserve prices, that ranged from 
$118 to $120. Opening prices ranged from $117 to $117.50, high bids ranged from 
$117.50 to $119. The state-by-state breakdown looks like this: Texas 1,967 
total head, with 1,038 head sold at $118.50-$119, 727 head unsold, and 202 head 
were scratched; Nebraska 118 total head, with 53 head sold at $117.75, 65 head 
went unsold; Kansas 68 total head, all of which went unsold.

   Boxed beef prices are sharply higher: choice up $3.95 ($305.17) and select 
up $3.14 ($287.05) with a movement of 79 loads (51.14 loads of choice, 13.65 
loads of select, 4.51 loads of trim and 9.29 loads of ground beef).


   The feeder cattle contracts have been alleviated from some of their pressure 
as the corn market takes a break from its usual $0.20 rally and is only 
currently rallying by a mere $0.02 to $0.03 in the nearby contracts at noon. 
May feeder cattle are up $0.85 at $130.60, August feeder cattle are up $0.62 at 
$143.80 and September feeders are up $0.70 at $146.30. Given how aggressively 
the feeder cattle contracts have been pushed lower by the onset of unfathomable 
input prices and sorry fat cattle prices, the complex has plenty of room to 
trade higher before feeling any resistance.


   The lean hog complex continues to rally as traders see demand thriving 
throughout the market and know that with shortened supplies of market-ready 
hogs that tight supplies drive prices higher. June lean hogs are up $0.47 at 
$114.02, July lean hogs are up $0.80 at $114.22 and August lean hogs ae up 
$0.90 at $109.37. For a second day in a row now, the top bid in the cash market 
has seen a steady increase and cash hog prices continue to scale higher as 
packers are buying any hogs that become available.

   The projected lean hog index for 5/4/2021 is up $0.52 at $107.89, and the 
actual index for 5/3/2021 is up $0.27 at $107.37. Hog prices are higher on the 
National Direct Morning Hog Report, up $2.50 with a weighted average of 
$114.11, ranging from $107.04 to $122.00 on 5,625 head and a five-day rolling 
average of $111.26. Pork cutouts total 184.40 loads with 158.50 loads of pork 
cuts and 25.89 loads of trim. Pork cutout values: up $3.11, $114.29.

   ShayLe Stewart can be reached

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