DTN Midday Livestock Comments 06/21 11:51
Livestock Contracts Search for Direction
Heading into Monday afternoon, the livestock contracts aren't met with an
overabundance of support as traders are leery.
DTN Livestock Analyst
The livestock contracts are trudging through the week's early trade as the
market tries to gain some understanding of where prices are headed. Traders are
especially leery of the lean hog market as a regression is well underway. July
corn is up 8 3/4 cents per bushel and July soybean meal is up $0.50. The Dow
Jones Industrial Average is up 498.23 points and NASDAQ is up 95.99 points.
Live cattle futures are modestly lower as the market looks for a sense of
direction, unsure where the week is headed at this point. There's a lot of
business to be conducted this week for the cattle market. Wednesday there will
be a Senate Ag Committee hearing titled, "Examining Markets, Transparency and
Prices From Cattle Producer to Consumer." Thursday there is another big feeder
cattle sale as Northern Livestock Video Auction hosts their Early Summer
Special. Friday we welcome another Cattle on Feed Report. So, while the markets
and traders try to make sense of the technical and fundamental tones of the
marketplace, cattlemen will have plenty to manage as well with the week's busy,
busy schedule. The weaker trade seen last week throughout the corn market
helped encourage the live cattle market partly. But more than anything, it was
the $2.00 to $4.00 advancement made in the cash cattle market. Packers aren't
going to be overly keen about moving the market higher again this week after
they gave up some margin last week. But with the cattlemen getting the
attention of Washington, D.C., the packers won't want to cut the market
viciously either. June live cattle are down $0.47 at $120.57, August live
cattle are down $0.82 at $120.70 and October live cattle are down $0.75 at
Last week's negotiated cash cattle trade totaled 79,496 head with 78%
(62,309 head) being committed for the nearby delivery, while the remaining 22%
(17,187 head) were committed for the deferred delivery in the following 15 to
Boxed beef prices are lower: choice down $0.89 ($322.39) and select down
$2.24 ($281.37) with a movement of 33 loads (15.32 loads of choice, 8.09 loads
of select, 4.60 loads of trim and 4.54 loads of ground beef).
Breaking into Monday's trade, feeder cattle futures thought they were going
to be able to continue last week's rally with the corn market's weaker tone.
But as the day nears the noon hour, the market's tone isn't as favorable to
feeders. With nearby corn prices trading mildly higher, the feeder cattle
contracts are back to a modest regression as the live cattle market offers no
support and traders are still trying to piece together the market signals to
find a definitive direction. August feeders are down $0.87 at $154.15,
September feeders are down $0.70 at $156.52 and October feeders are down $0.57
As the market welcomes Monday, hog producers brace themselves for the week
ahead. Looking at the market's charts, aggressive deterioration is seen all
throughout the nearby and deferred contracts as the market refocuses its
trajectory amid a weakening hog market in China and hit-and-miss consumer
demand. Gauging how aggressive consumers are going to be after the Memorial Day
weekend is always a tough mission for the retail sector. But with meat prices
as high as they are, buyers have had even a tougher row to hoe as they want to
offer enough choices but don't want to get stuck with overpriced product.
Grinding through this week's trade, continuing to monitor slaughter speeds as
it affects the cash hog market's fate and pork cutout values will be helpful in
understanding the nearby market.
The projected CME Lean Hog Index for 6/18/2021 is up $0.25 at $120.63 and
the actual index for 6/17/2021 is down $1.30 at $120.38. Hog prices are higher
on the National Direct Morning Hog Report, up $3.44 with a weighted average of
$119.48 ranging from $113.00 to $135.00 on 4,812 head and a five-day rolling
average of $120.13. Pork cutouts total 153.45 loads with 129.38 loads of pork
cuts and 24.06 loads of trim. Pork cutout values: up $6.87, $127.52.
ShayLe Stewart can be reached at firstname.lastname@example.org
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