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DTN Midday Livestock Comments          05/19 11:31

   Mixed Tones Filter Through Livestock Contracts

   A weaker, cautious tone is the theme throughout Thursday's livestock complex 
as the contracts look for support but aren't finding much.

ShayLe Stewart
DTN Livestock Analyst


   After Wednesday's tumultuous downpour in the cattle contracts, the live 
cattle market is attempting to regain some position in its nearby contracts, 
but the deferred months are still depressed. The feeder cattle market is 
trending lower as support is null throughout its market and the lean hog 
contracts are trading mildly weaker. July corn is up 4 cents per bushel and 
July soybean meal is up $11.80. The Dow Jones Industrial Average is down 192.89 


   After Wednesday's bloodbath, the live cattle market has found support for 
its nearby contracts, but the premium in the deferred months continues to 
wither away. June live cattle are up $0.12 at $131.62, August live cattle are 
up $0.27 at $131.97 and October live cattle are up $0.07 at $138.00. Thursday's 
export report wasn't expected to be as grandiose as last week's marketing-year 
high, but the report was still bullish with its sale of 23,300 mt. With mixed 
tones coming from U.S. consumers thanks to inflation and a looming recession, 
the market is clinging to its export market as it's helping move high quality 
beef. The cash cattle market hasn't seen any new business develop. Packers are 
sitting on a plethora of cattle in their deferred delivery commitments, so it's 
likely that this week's volume will be thin. Asking prices for cattle left on 
showlists remains $138 to $140 in the South and $227 plus in the North. 
Throughout the week Southern live cattle have traded for $136 to $138 (mostly 
$2.00 lower than last week), and Northern dressed cattle have sold for $223 to 
$228 (mostly $3.00 lower than last week). 

   Beef net sales of 23,300 mt for 2022 were down 18% from the previous week, 
but up 35% from the prior four-week average. The three largest buyers were 
Japan (7,900 mt), South Korea (7,400 mt) and China (2,900 mt).

   Boxed beef prices are mixed: choice up $1.00 ($261.47) and select down $0.05 
($245.97) with a movement of 45 loads (29.61 loads of choice, 8.34 loads of 
select, zero loads of trim and 6.66 loads of ground beef).


   As the corn market trades mixed -- slightly higher in its July contract but 
lower in the other nearby markets -- the feeder cattle contracts feel hesitant 
about trading higher with the live cattle market extending modest support, but 
both soybeans and soybean meal rallying aggressively. August feeders are down 
$0.10 at $165.82, September feeders are up $0.05 at $168.50 and October feeders 
are up $0.10 at $170.82. If the grain complex grows stronger, it's likely that 
feeders end up trading fully lower as the support that's coming from the live 
cattle market isn't strong enough to wane off the crippling effects of higher 
feed prices, and the live cattle market itself is subject to trading lower as 
the week has felt pressure both technically and fundamentally through weaker 
cash prices.


   After defending its stronger take on Wednesday's market when the rest of the 
marketplace seemed to know no bottom, the lean hog contracts are trading 
slightly lower in Thursday's afternoon. The market doesn't appear to be 
questioning its move, but rather to be taking a momentum to rest its rally and 
breathe. June lean hogs are up $0.12 at $106.22, July lean hogs are down $0.32 
at $108.25 and August lean hogs are down $0.85 at $107.00.

   The projected lean hog index for May 18 is up $0.29 at $100.37, and the 
actual index for May 17 is up $0.18 at $100.08. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $1.74 with a weighted average of $110.23, 
ranging from $102.00 to $116.00 on 6,330 head and a five-day rolling average of 
$106.52. Pork cutouts values are unavailable due to packer submission issues.

   Pork net sales of 24,100 mt for 2022 were down 8% from the previous week, 
but up 2% from the prior four-week average. The three largest buyers were 
Mexico (8,400 mt), South Korea (4,300 mt) and Colombia (2,400 mt).

   ShayLe Stewart can be reached

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