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DTN Midday Livestock Comments          06/17 11:46

   Feeder Cattle Contracts Rally Full Steam Ahead

   The live cattle and lean hog contracts are trending lower after a weaker 
export report but the feeder cattle market is rallying amid weaker corn prices.

ShayLe Stewart
DTN Livestock Analyst


   The corn market's $0.28 to $0.30 regression is helping aid in the feeder 
cattle contracts rally late in the week. Cow calf producers are hoping that 
this ease on input prices helps feedlots grow more aggressive in their feeder 
cattle quest. July corn is down 29 3/4 cents per bushel and July soybean meal 
is down $2.90. The Dow Jones Industrial Average is down 168.67 points and 
NASDAQ is up 155.64 points.


   The live cattle market has begun to slump lower through Thursday's trade as 
traders aren't rallying the futures market, and the cash cattle market sits 
idly. June live cattle are down $0.12 at $122.10, August live cattle are down 
$1.22 at $123.67 and October live cattle are down $0.70 at $129.27. With boxed 
beef prices lower, it came as quite the surprise to see cash cattle prices 
higher let alone steady, so seeing the slight weakness through Thursday's trade 
isn't baffling given that the market wasn't even expected to perform as well as 
it has over the last week. Asking prices for cattle left on showlists are 
around $122 plus in the South, and $195 to $197 in the North. Throughout the 
week Northern live dressed cattle have sold for $193 to $197, mostly at $195 
which is $4.00 higher than last week. Live cattle in the South have traded for 
$122 to $123, mostly at $122, which is generally $2.00 higher.

   Beef net sales of 12,800 mt reported for 2021 were down 20% from the 
previous week and 36% from the prior four-week average. The three largest 
buyers were Japan (4,400 mt), China (3,600 mt) and South Korea (1,700 mt).

   Boxed beef prices are lower: choice down $2.92 ($326.25) and select down 
$1.66 ($288.30) with a movement of 61 loads (36.88 loads of choice, 12.04 loads 
of select, 7.44 loads of trim and 4.35 loads of ground beef).


   The feeder cattle contracts have been relentless this past week, continuing 
to rally full speed ahead as the corn market makes it nearly impossible to pass 
up the opportunity when it's trading $0.18 to $0.22 lower in the nearby 
contracts. August feeders are up $1.65 at $159.35, September feeders are up 
$0.95 at $160.75 and October feeders are up $0.77 at $162.07. The market's 
unwavering spirit couldn't come at a better time as the industry is sitting 
through and/or watching Thursday's feeder cattle sale with Superior's Corn Belt 
Classic debut. With right at 51,000 head selling throughout the day, cattlemen 
will have a better sense of what the feeder cattle market could offer this fall 
after the sale.


   The lean hog market didn't fare well after seeing the morning's export 
report as it wasn't only disappointing to see sales lower, but also 
disappointing to see that China wasn't among one of the largest buyers. The 
market's run of weaker pork cutout prices along side a weaker export report has 
traders leery of the market and they're flat unwilling to support the market 
for the meantime. July lean hogs are down $4.02 at $111.47, August lean hogs 
are down $4.10 at $107.67 and October lean hogs are down $2.47 at $88.60.

   The projected lean hog index for June 16 is down $0.91 at $121.68 and the 
actual index for June 15 is down $0.07 at $122.59. Hog prices are lower on the 
National Direct Daily Hog Report, down $2.84 with a weighted average of 
$119.30, ranging from $114.50 to $130.00 on 4,655 head and a five-day rolling 
average of $118.13. Pork cutouts total 135.81 loads with 101.93 loads of pork 
cuts and 33.88 loads of trim. Pork cutout values: up $6.68, $127.20.

   Pork net sales of 29,300 mt reported for 2021 were up 49% from the previous 
week and 8% from the prior four-week average. The three largest buyers were 
Mexico (19,100 mt), Japan (5,300 mt) and South Korea (2,300 mt).

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

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