DTN Midday Livestock Comments          04/20 11:47

   Livestock Contracts Back to Trading Fully Higher

   And just like that the livestock complex has had a change in attitude and 
heading into Tuesday afternoon trade the entire livestock sector is trading 
higher. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The cattle contracts felt left out Monday afternoon as the lean hog 
contracts rallied throughout the day. But with the dawning of a new day and a 
strong shot of optimism the entire livestock complex is now rallying into 
Tuesday afternoon. May corn is up 15 cents per bushel and July soybean meal is 
up $4.70. The Dow Jones Industrial Average is down 236.43 points and NASDAQ is 
down 130.06 points.

   LIVE CATTLE:

   The live cattle contracts decided eight consecutive days in a row of lower 
trade was enough and are back to rallying modestly. April live cattle are up 
$0.47 at $120.82, June live cattle are up $1.05 at $119.65 and August live 
cattle are up $1.15 at $119.80. With both boxed beef prices higher and a 
rigorous kill schedule expected for the week ahead, feedlots are liking how 
this week's market is shaping up for the cash cattle side of things. With the 
futures market now playing a supportive role in the week's developments, 
feedlots could stand to gain at least $1.00 or $2.00 amid strong demand and 
favorable fundamental signs. Feedlots have yet to share their asking prices and 
bids have yet to surface and it's most likely that the week's business will at 
least wait until Wednesday to transpire if not later. Packers have bought a 
considerable number of cattle for delayed delivery and that could be one hiccup 
that arises in the cash cattle market and makes it more difficult for feedlots 
to demand higher prices.

   Boxed beef prices are higher: choice up $1.38 ($277.55) and select up $1.30 
($270.43) with a movement of 56 loads (30.18 loads of choice, 5.48 loads of 
select, 10.28 loads of trim and 10.43 loads of ground beef).

   FEEDER CATTLE:

   And just like that, the spot May corn contract jumps $0.15 Tuesday morning 
to now demand a stout $6.07 per bushel price. And as odd as it may seem, the 
feeder cattle contracts have gone from trading lower early Tuesday morning to 
now trading modestly higher in the nearby contracts and well over $1.00 higher 
in some of the deferred contracts. April feeders are up $0.42 at $138.15, May 
feeders are up $0.97 at $143.45 and August feeders are up $1.62 at $154.40. 
Call it what you want. Some will say higher corn prices may be summoning higher 
cattle prices; some will say feeders are trying to establish a short-term 
bottom; and some will fall flat out of their feed-wagons and howl that the 
markets are plum drunk at noon!

   LEAN HOGS:

   Last week's hard sell-off in the futures complex surely didn't feel good at 
the moment but it has allowed for the contracts to rally early this week 
without any resistance pressure. June lean hogs are up $1.55 at $105.87, July 
lean hogs are up $1.77 at $103.75 and August lean hogs are up $1.32 at $99.87. 
Paying much attention to the midday pork cutout value doesn't do anyone much 
good, so don't let the slightly weaker pork cutout concern you. It's positive 
to see cash prices higher Tuesday morning but heading into the afternoon it's 
going to be even more important to keep an eye on the day's estimated slaughter 
and the total number of hogs bought through the cash market. Strong slaughter 
speeds will be challenged in the weeks and months to come from limited hog 
supplies but keeping a snappy pace is vital to keep up with demand.

   The projected CME Lean Hog Index for 4/19/2021 is up $0.65 at $104.42 and 
the actual index for 4/16/2021 is up $0.52 at $103.76. Hog prices are higher on 
the National Direct Morning Hog Report, up $0.88 with a weighted average of 
$103.88, ranging from $102.82 to $109.00 on 2,826 head. Pork cutouts total 
221.93 loads with 210.40 loads of pork cuts and 11.53 loads of trim. Pork 
cutout values: down $0.25, $113.83.

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




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