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DTN Midday Livestock Comments          05/26 12:06

   Feeder Cattle Lead Complex Higher                   

   Firm support is holding across feeder cattle contracts as traders look for 
additional longer-term direction and the expectation that feeder cattle 
supplies may remain tight through most of the summer months. 

By Rick Kment
DTN Analyst


   Strong gains have developed in the feeder cattle futures as traders seem to 
be adjusting to tighter than expected numbers in the cattle on feed report 
Friday, even though the report came out when markets were open Friday, the lack 
of volume before the long weekend pushed most of the trade activity to Tuesday 
morning. Corn prices are lower in light trade. July corn futures are 4 cents 
per bushel lower. Stock markets are lower in light trade. The Dow Jones is 205 
points lower while Nasdaq is down 58 points.


   Lack of activity is seen across live cattle trade early Tuesday morning with 
traders focusing on the inability of buyers stepping back into the complex as 
prices have moved from moderate early gains to a narrowly mixed trading range 
at midday. The sluggish activity in beef values overshadowed the narrow to 
moderate price support, and is creating some concern that short term support in 
the market may not be as optimistic as some had hoped going into the holiday 
weekend. Cash cattle activity remains dead in the water following trade 
trickling into the market over last half of the week before the holiday 
weekend. It is likely that active trade may be delayed until Thursday or later, 
with bids still undeveloped Tuesday Morning and asking prices still hard to 
pinpoint. Beef cut-outs at midday are higher, $1.13 higher (select) and up 
$0.25 per cwt (choice) with light movement of 68 total loads reported (35 loads 
of choice cuts, 15 loads of select cuts, 11 loads of trimmings, six loads of 
ground beef).


   Strong gains continue to develop through the feeder cattle futures as spill 
over support from the bullish cattle on feed report is helping to hold 70 to 80 
cent per cwt gains through most of 2015. The lack of support seen in the live 
cattle complex at midday is so far having very little effect in the overall 
tone of feeder cattle buying as traders look at supporting the long term 
direction of the market, rather than being heavily influenced by early summer 
demand and beef movement over the holiday. 


   Moderate losses continue to hold through the morning Tuesday as traders are 
taking a much more cautious approach to the market with the expectation that 
additional pressure may continue to develop in cash hog prices as through early 
week activity. Even though procurement numbers will continue to remain light 
through the holiday week, packers seem to be unwilling to aggressive go after 
hogs at this point, allowing many to wonder if cash prices may continue to 
erode well into early June. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $0.67 per cwt to 
$76.51 per cwt with the range from $72.00 to $79.00 per cwt on 3,963 head 
reported sold. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report 
reported 159 loads selling with prices adding $1.07 per cwt. Lean hog index for 
5/21 is at $83.12 down 0.08, with a projected two-day index of $82.91 down 

   Rick Kment can be reached at rick.kment@dtn.com 


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