DTN Midday Livestock Comments 06/11 11:42
Light Load Count, Weaker Boxed Beef Prices Mark Friday Midday
With only 33 loads of beef cuts at midday and a projected slaughter of
117,000 head, all eyes will be on the afternoon beef reports as these volumes
aren't beneficial to the marketplace.
DTN Livestock Analyst
Traders have grown fond of both the live cattle and feeder cattle contracts
throughout Friday trade and the cattle complex is delighted to see support
before the weekend. Meanwhile, the lean hog contracts are coasting lower,
seeming to buy themselves time until next week provides direction. July corn is
down 21 1/4 cents per bushel and July soybean meal is down $3.20. The Dow Jones
Industrial Average is down 119.37 points and NASDAQ is down 1.78 points.
Live cattle futures aren't rallying as aggressively as the feeder cattle
contracts, but Friday's upward push of $1.00 to $2.00 higher is allowing the
June live cattle contracts to challenge the 100-day moving average ($118.71).
Traders may be looking to invest before the weekend and we know that the most
reliable information comes from the afternoon reports. But seeing the thin load
count on this morning's boxed beef report is bothersome. Not only are both
choice and select cuts lower, but a volume of only 33 loads is pitiful. The
day's slaughter is only projected to be around 117,000 which is inadequate to
meet the market's high demand and to ensure sufficient throughput. The cash
cattle market hasn't seen a bit of attention as the week's business is
essentially done with. There may be some dismal clean-up trade develop here and
there but it won't likely amount to much.
Boxed beef prices are lower: choice down $0.48 ($337.77) and select down
$4.89 ($305.51) with a movement of 33 loads (15.05 loads of choice, 11.61 loads
of select, zero loads of trim and 6.54 loads of ground beef).
Corn futures are 14 to 20 cents lower in the nearby contracts and this has
granted the feeder cattle market an opportunity to rally into the weekend.
August feeders are up $2.97 at $151.37, September feeders are up $2.72 at
$153.62 and October feeders are up $2.40 at $155.65. For the most part, this
past week hasn't extended the feeder cattle complex any favors as the market
had to juggle back-and-forth signals from the corn sector, topping boxed beef
prices and stagnant cash cattle trade. But, then again, what's new?
Lean hog futures may be trading lower, but it's not because the market lacks
demand or is flush on supplies. As traders look to the weekend and look at the
hog rally since the first of the year, I think we all shake our heads in
disbelief. The market is settling into the July lean hog contract as the June
contract is set to expire Monday, June 14. With demand continuing to shine
through the market even after the Memorial Day holiday, packers are scrounging
the countryside for hogs and it's apparent in the market's cash spread of
$25.55 that finding market-ready hogs in some regions is far harder than in
others. Nevertheless, traders will most likely let the market float throughout
the rest of Friday and will look to the beginning of next week to set the
market's tone. July lean hogs are down $1.45 at $119.85, August lean hogs are
down $1.92 at $116.77 and October lean hogs are down $1.17 at $96.72.
The projected CME Lean Hog Index for 6/10/2021 is up $0.95 at $120.86 and
the actual index for 6/9/2021 is up $1.20 at $119.91. Hog prices are lower on
the National Direct Morning Hog Report, down $5.17 with a weighted average of
$109.89, ranging from $104.45 to $130.00 on 1,580 head and a five-day rolling
average of $109.75. Pork cutouts total 179.31 loads with 157.58 loads of pork
cuts and 21.73 loads of trim. Pork cutout values: up $6.64, $140.69.
ShayLe Stewart can be reached at firstname.lastname@example.org
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