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DTN Midday Livestock Comments          05/10 11:46

   Monday's Weaker Corn Prices Give Cattle Contracts Hope

   Monday's weaker corn prices are just wanting the cattle contracts wanted to 
see, especially the feeder cattle contracts.

ShayLe Stewart
DTN Livestock Analyst


   Monday's pressure on the corn contracts has come as a beaming hope of joy 
for the feeder cattle contracts. Both the live and feeder cattle contracts are 
rallying into Monday's afternoon trade, but the feeder cattle contracts are 
making the most of the day's opportunity and are trading upward of $3.00 
higher. July corn is down 19 1/4 cents per bushel and July soybean meal is down 
$1.40. The Dow Jones Industrial Average is up 264.80 points and NASDAQ is down 
177.84 points.


   The live cattle contracts aren't jumping into Monday's market as boldly as 
the feeder cattle contracts are.  but still, higher trade is higher trade! June 
live cattle are up $2.00 at $118.02, August live cattle are up $0.95 at $119.80 
and October live cattle are up $0.62 at $124.07. Following last week's cash 
cattle market, where prices traded anywhere from $1.00 to $2.00 lower, feedlots 
are praying that this week is better. With rewarding boxed beef prices and 
consumer demand that seems to be relentless, packers should be willing to dive 
into the cash cattle market, but feedlots know that, unfortunately with 
packers' forward boughten supplies, their eagerness will still be minute. This 
week's showlists are somewhat higher in Texas, fully higher in Kansas but 
lighter in Nebraska and Colorado.

   Last week's negotiated cash cattle trade totaled 83,883 head. Of that 64% 
(54,064 head) were bought with delivery in the next two upcoming weeks, while 
the remaining 36% (29,819 head) are scheduled for delivery in the following 15 
to 30 days.

   Boxed beef prices are higher: choice up $1.64 ($307.52) and select up $3.28 
($293.55) with a movement of 33 loads (14.63 loads of choice, 5.59 loads of 
select, 4.74 loads of trim and 7.70 loads of ground beef).


   It's not a bird, it's not a plane, and no it's not superman -- the corn 
market is just trading lower, which has given the feeder cattle contracts the 
opportunity to trade sharply higher. May feeders are up $3.02 at $134.75, 
August feeders are up $3.57 at $147.85 and September feeders are up $3.15 at 
$149.20. The feeder cattle contracts have suffered a long, sharp decline thanks 
to the onset of wildly high corn prices and so, if the market extends any 
opportunity to climb out of the recently dug pit of sorry cattle prices, the 
market is jumping with joy. Looking at the countryside this week, the market 
doesn't expect to see a large number of calves and feeder cattle trade as most 
of the yearlings have already been worked through and there are a couple of 
weeks still to pass before producers begin to test the this year's feeder 
cattle market.


   The lean hog complex isn't breaking doors down to run bullishly into this 
week's trade like last week's market did. Instead, its seeming as if traders 
are curious as to how much the market's fundamentals are going to support these 
higher prices and want to be certain that the market will indeed continue to 
support these levels before scaling the market even higher. June lean hogs are 
down $0.82 at $112.02, July lean hogs are down $0.72 at $112.82 and August lean 
hogs are down $0.47 at $108.55. We know better than to put the cart before the 
horse, or in this case, maybe we should say to put the report in front of the 
hogs, but the morning's pork cutout is extremely light. Seeing how the 
afternoon report prints will be vital in trying to understand what the rest of 
the week's trajectory looks like.

   The projected lean hog index for May 7 is up $0.88 at $110.10, and the 
actual index for May 6 is up $0.67 at $109.22. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.51 with a weighted average of 
$109.30, ranging from $105.77 to $125.00 on 3,495 head and a five-day rolling 
average of $111.62. Pork cutouts total 98.59 loads with 83.97 loads of pork 
cuts and 14.62 loads of trim. Pork cutout values: up $1.98, $115.77.

   ShayLe Stewart can be reached

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