DTN Midday Livestock Comments          06/01 11:42

   Feedlots Hold Out for More Money Thursday

   The cash cattle market has yet to really see what will develop in the cash 
sector as feedlots hold out for more money.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   Both the live cattle and feeder cattle market are rallying into Thursday's 
noon hour as traders are anxiously awaiting to see what develops in the cash 
market. Meanwhile, the lean hog market isn't as optimistic as its market is 
trading mostly lower after posting two substantially higher days earlier this 
week. July corn is up 1 3/4 cents per bushel and July soybean meal is up $6.80. 
The Dow Jones Industrial Average is up 213.54 points.

LIVE CATTLE:

   You could call this week's draw out cash cattle trade a slow game of cat and 
mouse as feedlots remain clam knowing that packer interest will need to 
increase as the minutes tick by. However, this week's trade is more card game 
when all the players have their poker faces on, as feedlots take an extra drag 
on their cigars, blow their smoke aside and then lean in next to packers and 
ask, "how bad do you want them?" There are bids of $170 to $171 being offered 
in Kansas, and bids of $183 to $185 live being offered in Colorado and 
Nebraska, as well as a bid of $288 dressed in Nebraska, but, at this point, 
feedlots have elected to let those offers sit on the table. Packer interest 
should improve as the afternoon passes by because packers simply cannot afford 
to be complacent in this week's market and come out short bought. The waiting 
nature of the cash cattle complex has traders chomping at the bit as they 
anxiously wait to see what prices do this week. June live cattle are up $3.67 
at $172.80, August live cattle are up $3.25 at $170.87 and October live cattle 
are up $2.92 at $174.70.

   Boxed beef prices are higher: choice up $1.23 ($307.07) and select up $0.01 
($287.16) with a movement of 72 loads (50.77 loads of choice, 17.84 loads of 
select, zero loads of trim and 3.16 loads of ground beef).

FEEDER CATTLE:

   Thanks to the continued support of the live cattle complex, the feeder 
cattle contracts are still trading higher even though corn prices are now 
trading $0.02 to $0.08 higher in the nearby contracts. The live cattle market 
is seeming to rip-roar through Thursday's trade with feedlots letting packers 
sit anxiously as they wait for them to up their bids. It's likely that when 
cash cattle trade does develop this week that it will be steady to somewhat 
higher, which should help add even more support to feeders. August feeders are 
up $0.30 at $239.47, September feeders are up $0.62 at $242.82 and October 
feeders are up $0.62 at $244.75.

LEAN HOGS:

   The lean hog complex has traded mixed throughout Thursday's market as 
traders are leery of advancing the market much more, but do appreciate the 
fundamental support that's helped support the complex this week. June lean hogs 
are up $0.27 at $82.85, July lean hogs are down $1.77 at $81.55 and August lean 
hogs are down $2.20 at $79.65. It's quite surprising that morning cash prices 
are up as aggressively as they are, which likely means that packers entered 
into this week's market short bought. Demand will likely remain strong through 
the afternoon, but Friday's market may not see the same interest.

   The projected lean hog index for May 31 is up $0.10 at $79.63, and the 
actual index for May 30 is down $0.55 at $79.53. Hog prices are higher on the 
Daily Direct Morning Hog Report, up $5.13 with a weighted average price of 
$85.58, ranging from $79.00 to $90.00 on 11,630 head and a five-day rolling 
average of $81.18. Pork cutouts total 118.20 loads with 104.16 loads of pork 
cuts and 14.03 loads of trim. Pork cutout values: up $0.35, $85.62.

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




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