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DTN Midday Livestock Comments          06/15 11:39

   Feeders Are Back at It

   Continuing in Monday's manner, the feeder cattle and live cattle contracts 
are back to rallying Tuesday amid lower corn prices.

ShayLe Stewart
DTN Livestock Analyst


   The strength that the feeder cattle contracts saw throughout Monday's trade 
is again evident in Tuesday's market as the contracts continue to push higher 
and higher. The excitement in the feeder cattle market is trickling into the 
live cattle arena. But given that the cash cattle market has yet to be tested 
this week, we don't know if it will be enough support to offset the market's 
weaker boxed beef prices. July corn is down 4 3/4 cents per bushel, and July 
soybean meal is down $1.60. The Dow Jones Industrial Average is down 138.40 
points, and the NASDAQ is down 83.93 points.


   As unbelievable as it may seem given that the market hasn't seen much 
support over the last two months, the live cattle contracts are rallying well 
over $1 higher in the nearby contracts. The market's decision to trade higher 
seems somewhat odd given the fact that boxed beef prices have just recently 
made a seasonal top and that they're now trading lower. But the support that's 
spinning in the feeder cattle market has seeped over to the live cattle sector, 
and corn's lower descent comes as a breath of fresh air. June live cattle are 
up $1.52 higher at $120.90, August live cattle are up $2 at $123.27, and 
October live cattle are up $1.55 at $128.35. The cash cattle market has yet to 
see any business develop, but if the week follows the market's recent trend 
some trade could begin to develop later this afternoon. Bids are elusive to the 
market at this point, but asking prices in the South have been noted at $122 
plus, and in the North from $195 to $197.

   Boxed beef prices are lower: choice down $0.80 ($334.67) and select down 
$4.78 ($298.63) with a movement of 69 loads (32.88 loads of choice, 22.04 loads 
of select, 11.29 loads of trim and 2.88 loads of ground beef).


   The feeder cattle contracts have waited a long time since they last saw the 
market trade higher. August feeders are up $2.60 at $157.20, September feeders 
are up $2.25 at $159.07 and October feeders are up $2.12 at $60.70. The 
market's strength is solely rallying off the fact that the corn market is 
trading lower. High input costs are plaguing the entire beef sector, from the 
high price of grass to the growing price of hay. And, of course, the sharply 
high corn prices make it hard for anyone's math equation to find a profitable 
outcome given the current market environment. If this upward momentum could 
hold at least steady throughout the week, it's very likely that the Superior's 
Corn Belt Classic could see some excited buyers. But just as the market can 
trade higher, a change in the corn market could weaken the market's hopeful 


   Despite the starkly higher cash hog prices and the higher pork cutout 
values, the lean hog contracts aren't willing to turn and trade higher just 
yet. With the contracts trading at levels not seen since 2014, traders want to 
be certain (C.E.R.T.A.I.N) that the demand seen in the market is indeed going 
to trend throughout the week before they move their positions in support. July 
lean hogs are down $0.40 at $117.82, August lean hogs are down $0.87 at $113.92 
and October lean hogs are down $0.87 at $93.95. Tuesday's slaughter is 
estimated at 483,000 head, which would be a strong day for the market.

   The projected lean hog index for 6/14/2021 is up $0.75 at $122.66, and the 
actual index for 6/11/2021 is up $1.05 at $121.91. Hog prices are sharply 
higher on the National Direct Morning Hog Report, up $10.69 with a weighted 
average of $121.38, ranging from $110.43 to $136.00 on 4,970 head and a 
five-day rolling average of $114.30. Pork cutouts total 195.48 loads with 
176.03 loads of pork cuts and 19.45 loads of trim. Pork cutout values: up 
$3.58, $132.26.

   ShayLe Stewart can be reached at

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