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DTN Midday Livestock Comments 05/07 11:49
Higher Midday Boxed Beef Prices Encourage Traders
The entire livestock complex is trading higher into Tuesday's noon hour as
traders are hopeful consumer support is increasing.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The livestock complex is trading higher into Tuesday afternoon as traders
are seeing enough fundamental support to justify higher trade. The biggest,
exciting factors affecting the market are midday boxed beef prices are higher
and the feeder cattle complex is boldly leading the charge to higher trade in
the cattle complex. July corn is down 1 1/4 cents per bushel and July soybean
meal is down $2.90. The Dow Jones Industrial Average is up 58.95 points.
LIVE CATTLE:
With the rallying support of the feeder cattle complex and stronger midday
boxed beef prices, the live cattle complex is back to trading higher. June live
cattle are up $1.60 at $178.57, August live cattle are up $1.77 at $176.17 and
October live cattle are up $1.50 at $179.37. It's impressive that the spot June
contract is trading above the market's 40-day moving average. If it is able to
close at this level, it will be positioned to either close at the market's
current resistance point or slightly below. And so long as boxed beef demand
remains stable and supportive, traders may deem there's enough support in the
complex to challenge that resistance threshold. No business has developed yet
in the cash cattle market and it's not likely trade will develop until after
Wednesday at some point.
Boxed beef prices are higher: choice up $1.60 ($300.36) and select up $3.16
($292.91) with a movement of 53 loads (25.99 loads of choice, 11.47 loads of
select, zero loads of trim and 15.55 loads of ground beef).
FEEDER CATTLE:
Traders are relieved to see corn prices trading mostly steady as this leaves
room and opportunity for the feeder cattle complex to again trade higher. All
eyes are currently on boxed beef prices as the industry desperately hopes to
see interest increase as this is historically when boxed beef demand is
extremely strong. Either way, as the old saying goes, "Feeders are the
leaders," and it's been that way in the market's current move -- so seeing most
of the feeder cattle contracts trade higher is encouraging to the entire cattle
complex. May feeders are up $1.85 at $243.25, August feeders are up $2.52 at
$255.40 and September feeders are up $2.52 at $256.40.
LEAN HOGS:
The lean hog complex is trading slightly higher as traders took note of
Monday afternoon's higher carcass price and hope consumer support will again be
found in this afternoon's closing report. June lean hogs are up $0.17 at
$98.35, July lean hogs are up $0.52 at $102.67 and August lean hogs are up
$0.42 at $101.62. There have been over 2,000 hogs traded thus far Tuesday and
it's likely packer interest will improve as the day trades on.
The projected CME Lean Hog Index for 5/6/2024 is up $0.24 at $91.03 and the
actual index for 5/3/2024 is down $0.16 at $90.80. Hog prices on the Daily
Direct Morning Hog Report average $94.18, ranging from $86.00 to $95.00 on
2,612 head and a five-day rolling average of $91.62. Pork cutouts total 161.24
loads with 141.99 loads of pork cuts and 19.25 loads of trim. Pork cutout
values: down $1.96, $97.54.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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