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DTN Midday Livestock Comments          06/16 11:46

   Feeders Higher Amid Rallying Corn Prices 

   The cattle market is seeming to gain more interest as the week trades on 
despite rallying corn prices and a weaker boxed beef market. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The market hasn't changed much from Tuesday as the cattle contracts continue 
to rally higher and the lean hog market continues to veer lower. But what has 
been interesting is watching the market's confidence in the cattle rally grow 
throughout the week. Even with corn prices trending higher, the feeder cattle 
contracts are standing firm in their rally and cattlemen hope this positive 
roll is seen in this week's Superior sale. July corn is up 11 1/2 cents per 
bushel and July soybean meal is up $9.20. The Dow Jones Industrial Average is 
down 66.53 points and NASDAQ is down 22.79 points.

   LIVE CATTLE:

   Live cattle futures have broken out and are taking Wednesday by charge as 
traders are willing to invest and the higher prices seen throughout the cash 
market are invigorating the surge. June live cattle are up $1.07 at $122.30, 
August live cattle are up $1.27 at $125.17 and October live cattle are up $1.15 
at $129.77. This rally comes at a perplexing time as the boxed beef market is 
veering lower. But its momentum is so strong that a number of the contracts 
have made new contract highs. As we mentioned before, it will be vital for the 
long-term health of the cattle market to see vigorous processing speeds 
throughout the entire month of June. If the market can kick production into 
high gear and far surpass what it's been doing as of late, then optimism could 
continue to build. There's been a light trade of cattle in parts of Nebraska 
for $124 live and $195 dressed, along with some cattle in Kansas for $122 live.

   The Fed Cattle Exchange Auction listed a total of 6,049 head; 889 actually 
sold; 712 head were scratched from the auction; and 4,448 head were listed as 
unsold, as they did not meet the reserve prices, which ranged from $120 to 
$122.50. Opening prices ranged from $118 to $120, high bids ranged from $119.25 
to $122.50. The state-by-state breakdown looks like this: Texas 5,585 total 
head, with 793 head sold at $121 to $122.50, 678 head were scratched from the 
auction, and 4,114 head went unsold; Kansas 339 total head, with 27 head sold 
at $119.25, 34 head were scratched from the auction, and 27 head went unsold; 
Oklahoma 125 total head, with 61 head sold at $122, 64 head went unsold.

   Boxed beef prices are lower: choice down $2.92 ($331.51) and select down 
$6.56 ($291.72) with a movement of 92 loads (47.82 loads of choice, 20.12 loads 
of select, 17.11 loads of trim and 6.93 loads of ground beef).

   FEEDER CATTLE:

   The feeder cattle market is serious about its rally this week and is 
rallying despite the corn market's strength which has come with Wednesday's 
favorable weather for this year's corn crop. Cow-calf producers are praying the 
market's strength is able to sustain throughout the end of the week and can 
encourage the large feeder cattle sales to push for higher prices. Feedlots, 
more than anything, want input costs to become more manageable as selling 
cattle at $120 to $122 amid $6.00 corn isn't a winning equation. August feeders 
are up $0.72 at $157.55, September feeders are up $0.85 at $159.50 and October 
feeders are up $0.87 at $160.90.

   LEAN HOGS:

   The pressure continues to build in the lean hog market as the market endures 
losses of $2.00 to $3.00 in its nearby contracts. With the regression seen over 
the last six days in the afternoon pork cutout value, traders aren't willing to 
rally the complex amid weaker demand. July lean hogs are down $3.00 at $115.50, 
August lean hogs are down $3.00 at $111.70 and October lean hogs are down $3.00 
at $91.02. Seeing the market trade lower isn't something we've seen in quite 
some time; but understanding that prices eventually top and supplies are still 
thin needs to be stressed as the market isn't battling an overabundance of hogs 
by any means.

   The projected CME Lean Hog Index for 6/15/2021 is down $0.07 at $122.59 and 
the actual index for 6/14/2021 is up $0.75 at $122.66. Hog prices are higher on 
the National Direct Morning Hog Report, up $0.76 with a weighted average of 
$122.14, ranging from $113.09 to $136.00 on 5,320 head and a five-day rolling 
average of $117.20. Pork cutouts total 219.23 loads with 197.37 loads of pork 
cuts and 21.85 loads of trim. Pork cutout values: up $2.11, $124.62.

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




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