DTN Midday Livestock Comments 04/13 11:42
Cattle Futures Lack Support
It's been a tough day thus far in the cattle futures, but the lean hog
market is back to modestly higher and is continuing to rally off strong demand
and tight supplies.
DTN Livestock Analyst
The cattle futures are having another bearish day, but the lean hog market
is back to its upward trend. With corn prices trading higher, the feeder cattle
contracts are on edge as rising input costs aren't what their bottom line likes
to see. May corn is up 12 3/4 cents per bushel and May soybean meal is down
$5.40. The Dow Jones Industrial Average is down 151.59 points and NASDAQ is up
Live cattle futures are continuing to scale lower in the same lackadaisical
manner as Monday's trade. April live cattle are down $0.12 at $122.60, June
live cattle are down $0.75 at $121.35 and August live cattle are down $0.72 at
$121.22. There may be more cattle on this week's showlists, but that isn't an
alarming concern given the fact that packers need cattle to keep up with
demand. If cash cattle prices can trade higher again this week, this will be
the fifth consecutive week in a row of higher prices. Prices may not be as
sharply higher as last week's advancement, but somewhere around $2.00 higher
isn't out of the equation. The countryside is still quiet without any bids
having developed. Asking prices are starting to develop in the South at $125
plus and the North has yet to share their asking prices for the week.
Boxed beef prices are mixed: choice down $1.60 ($269.81) and select up $0.74
($266.90) with a movement of 90 loads (53.90 loads of choice, 11.75 loads of
select, 4.45 loads of trim and 20.04 loads of ground beef).
With corn futures making a swing at regaining what Monday lost and adding
some to the complex, the feeder cattle contracts are having a depressed day as
inputs are rising and the live cattle market isn't showing any support for the
contracts to rally upon. April feeders are down $0.75 at $143.75, May feeders
are down $0.92 at $148.77 and August feeders are down $1.37 at $159.20. The
feeder cattle contracts are caught in the middle of absorbing what the corn
market does all while trying to balance the developments in the cash cattle and
live cattle markets. At this point, the market hasn't given the feeder cattle
complex much hope in trading higher but higher cash cattle prices later in the
week could spark some positivity.
Lean hog futures are back to trading higher after a doggish Monday. With the
April contract set to expire Thursday, the market is looking to June and July
to better gauge trader interest and market direction. Like we chatted about
earlier, with supplies tightening, the choppy price variations in the pork
cutout value is expected and most certainly evidenced in Thursday morning's
$5.36 increase compared to Monday's $3.83 decrease. With demand still showing
heightened interest and supplies continuing to tighten, these types of swings
are expected to continue.
The projected CME Lean Hog Index for 4/12/2021 is up $0.48 at $102.37, and
the actual index for 4/9/2021 is up $0.52 at $101.89. Hog prices are higher on
the National Direct Morning Hog Report, up $0.39 with a weighted average of
$99.96, ranging from $97.00 to $102.50 on 3,080 head and a five-day rolling
average of $99.01. Pork cutouts total 236.03 loads with 212.10 loads of pork
cuts and 23.93 loads of trim. Pork cutout values: up $5.36, 115.46.
ShayLe Stewart can be reached firstname.lastname@example.org
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