DTN Midday Livestock Comments          05/31 11:29

   Weak Corn Prices Propel Livestock Contracts

   The livestock complex is trading higher as traders again see the opportunity 
amid a softer corn market.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   It's another day when the livestock complex is trading higher primarily 
thanks to the regression seen in the corn complex. With inputs a major factor 
in ranch costs, seeing feed prices decline is a pleasant gesture that both 
operators and traders warmly welcome. July corn is down 4 3/4 cents per bushel 
and July soybean meal is down $2.50. The Dow Jones Industrial Average is down 
263.50 points.

LIVE CATTLE:

   The live cattle complex is again trading higher as traders note the 
regression in corn prices and are chomping at the bit to see what develops in 
this week's cash cattle market. June live cattle are steady at $168.87, August 
live cattle are up $0.20 at $167.35 and October live cattle are up $0.45 at 
$171.77. The big question of this week's live cattle market is: What are cash 
cattle prices going to do? On one hand, you could argue that packers got enough 
cattle bought last week and that prices are going to trade steady to somewhat 
lower. On the other hand, with beef demand as supportive as it is, packers 
can't afford to slow down processing speeds much more as they have money to be 
made from beef sales. No cash cattle trade has been reported at this point, and 
bids and asking prices aren't even listed yet. Trade is expected to be delayed 
until Thursday if not potentially Friday.

   Boxed beef prices are higher: choice up $0.63 ($305.59) and select up $0.44 
($288.21) with a movement of 80 loads (50.17 loads of choice, 12.24 loads of 
select, 9.62 loads of trim and 8.01 loads of ground beef).

FEEDER CATTLE:

   The feeder cattle complex is again trading higher as the market loves to see 
corn prices trading lower again Wednesday. With the nearby contracts trading 
anywhere from $0.06 to $0.08 lower, feeders feel more than comfortable trading 
higher as demand continues to flame their market higher. If cash cattle can 
trade steady to somewhat higher again this week, it's tough telling how excited 
the feeder cattle contracts could become. August feeders are up $1.62 higher at 
$239.42, September feeders are up $1.82 at $242.57 and October feeders are up 
$1.90 at $244.37.

LEAN HOGS:

   The lean hog market is trading higher yet again, and not by a mild measure, 
as some of the nearby contracts gapped higher at Wednesday's start. The 
combination of cheaper corn prices amid a market that's seeing stronger demand 
is helping give traders the confidence they needed in order to justify turning 
the market around and allowing for stronger trade. It will remain vital to the 
market's ability to continue to trade higher than pork demand remains stable, 
which is a big ask of a market that has plenty of supply and of a consumer base 
that's witnessing steep inflation. June lean hogs are up $1.67 at $82.50, July 
lean hogs are up $3.82 at $83.35 and August lean hogs are up $3.07 at $81.87. 

   The projected lean hog index for May 30 is down $0.55 at $79.53, and the 
actual index for May 29 is down $0.40 at $80.08. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $5.34 with a weighted average price of 
$80.45, ranging from $76.00 to $87.00 on 6,015 head and a five-day rolling 
average of $77.99. Pork cutouts total 177.41 loads with 156.89 loads of pork 
cuts and 20.52 loads of trim. Pork cutout values: up $2.87, $86.55.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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