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DTN Midday Livestock Comments          05/07 11:37

   Friday's Modest Corn Rally Allows Feeders to Rally

   The feeder cattle contracts aren't going to let Friday pass them by without 
taking advantage of the market's opportunity to rally.

ShayLe Stewart
DTN Livestock Analyst


   If anything, the live cattle contracts should be encouraging the feeder 
cattle contracts to trade higher as the market has had the supportive nature of 
an exceptional boxed beef market. But Friday's developments aren't panning out 
to be quite that. Instead, the feeder cattle contracts are taking the lead 
while the corn market posts mild gains, and consequently, the live cattle 
market is rallying in its footsteps. July corn is up 12 cents per bushel, and 
July soybean meal is up $9.30. The Dow Jones Industrial Average is up 152.22 
points, and the NASDAQ is up 162.66 points.


   The live cattle contracts are taking Friday's support with caution as the 
market rallies close to $1 higher but isn't willing to push the market much 
beyond that. June live cattle are up $1.07 at $116.55, August live cattle are 
up $0.97 at $119.45 and October live cattle are up $0.80 at $124.30. Even 
though the market's got the entire rest of the afternoon to tend to, the market 
is seeming all but checked out for the weekend already. Packers have bought the 
cattle they're going to buy, the boxed beef market has already made huge leaps 
and bounds throughout the week, and now it's just time to let traders trade 
until the day's final bell.

   Boxed beef prices are mixed: choice down $0.41 ($305.96) and select up $3.04 
($292.40) with a movement of 47 loads (27.39 loads of choice, 5.30 loads of 
select, 8.17 loads of trim and 6.60 loads of ground beef).


   Earlier in the day, the corn market was dancing on both sides of steady, 
seeming unsure if the market could pull off another day of higher gains. But, 
nevertheless, the complex is back to feeling like its normal self and is 
climbing modestly higher. The feeder cattle contracts have found ample support 
in Friday's market and are trending anywhere from $1 to $2 higher. And, earlier 
in the day, it was closer to $2 to $3 higher. Even with the corn market's 
modest rally, the feeder cattle contracts seem fairly confident in their rally, 
and unless corn takes a jump for the moon, the feeder cattle contracts may be 
able to end the week on a positive note. May feeders are up $2.30 at $132.77, 
August feeders are up $2.60 at $146 and September feeders are up $2.17 at 


   The nearby contracts are feeling some modest pressure throughout Friday 
morning's trade, but largely, the lean hog complex is still trading higher as 
the deferred contracts aren't being set back from the same lack of trade 
support. June lean hogs are down $1.42 at $113.07, July lean hogs are down 
$0.62 at $114.02 and August lean hogs are down $0.57 at $109.35. The cash hog 
market is trending lower thus far into Friday's trade. But understanding that 
kill schedules are light over the week without having enough hogs to run a full 
schedule will obviously mitigate packers' needs at the end of the workweek.

   The projected two-day lean hog index for 5/5/2021 is up $0.66 at $108.55, 
and the actual index for 5/4/2021 is up $0.52 at $107.89. Hog prices are lower 
on the National Direct Morning Hog Report, down $1.47 with a weighted average 
of $109.81 ranging from $108.00 to $123.00 on 2,570 head and a five-day rolling 
average of $111.46. Pork cutouts total 274.53 loads with 252.12 loads of pork 
cuts and 22.41 loads of trim. Pork cutout values: up $3.36, $117.22.

   ShayLe Stewart can be reached

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