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DTN Midday Livestock Comments          05/26 11:45

   Hogs Trend Higher as Export Demand Sees Support

   As the hog complex saw strong export interest, the market is rallying 
aggressively into Thursday afternoon.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   Heading into Thursday's afternoon, hog participants are praying that the 
market's pork cutout values fare well through the day's close so that Friday's 
market can keep its upward projection. The cash cattle market hasn't seen any 
renewed interest and it's looking like the bulk of this week's business is done 
with. July corn is down 2 1/2 cents per bushel and July soybean meal is up 
$7.10. The Dow Jones Industrial Average is up 537.81 points.

LIVE CATTLE:

   After absorbing Wednesday's weaker cash cattle trade, the live cattle 
contracts are teetering. One minute, they're trending slightly higher, and the 
next, they're trending somewhat lower. June live cattle are up $0.07 at 
$132.37, August live cattle are up $0.02 at $132.55 and October live cattle are 
steady at $138.20. After Wednesday's weaker, it's not that surprising to see 
the live cattle contracts trending slightly higher as the market continues to 
chop sideways. The cash cattle market hasn't seen any renewed interest, and at 
this point, it's looking like the bulk of this week's trade is done with. So 
far this week, Southern live trade has been marked at mostly $137, $1 lower 
than last week's weighted averages. Northern dressed deals were at mostly $223, 
generally $3 lower than last week's weighted averages basis Nebraska.

   Beef net sales of 20,000 mt for 2022 were down 14% from the previous week, 
but up 3% from the prior four-week average. The three largest buyers were Japan 
(8,400 mt), South Korea (3,900 mt) and China (2,500 mt).

   Boxed beef prices are higher: choice up $1.21 ($264.14) and select up $1.29 
($245.35) with a movement of 85 loads (50.89 loads of choice, 8.49 loads of 
select, 3.58 loads of trim and 22.10 loads of ground beef).

FEEDER CATTLE:

   The feeder cattle contracts are trending lower as the market follows the 
lead of the live cattle complex. August feeders are down $1.35 at $166.60, 
September feeders are down $1.35 at $169.70 and October feeders are down $1.22 
at $172.42. The corn complex isn't posing any pressure as it's trading steady 
to $0.03 lower in its nearby contracts, so Thursday's weaker market comes as a 
lack of support via technical support.

LEAN HOGS:

   The lean hog contracts are having a stellar day with the nearby contracts 
rally $2.00 to $3.00 higher. June lean hogs are up $2.42 at $111.35, July lean 
hogs are up $3.67 at $111.52 and August lean hogs are up $2.25 at $109.95. The 
market is trending substantially higher, as it's thankful to have gotten strong 
export interest, and, if the morning's pork cutout report carries its higher 
note through the afternoon, then the day could be setup to see strong demand 
carry through the afternoon and help out Friday's market.

   The projected lean hog index for May 25 is up $0.52 at $104.40, and the 
actual index for May 24 is up $0.84 at $103.88. Hog prices on the Daily Direct 
Morning Hog Report are lower, down $0.62 with a weighted average of $111.34, 
ranging from $104.00 to $116.50 on 7,243 head and a five-day rolling average of 
$111.79. Pork cutouts total 123.32 loads with 109.46 loads of pork cuts and 
13.86 loads of trim. Pork cutout values: up $1.82, $108.89.

   Pork net sales of 36,700 mt for 2022 were up 52% from the previous week and 
39% from the prior four-week average. The three largest buyers were Mexico 
(15,100 mt), Canada (5,700 mt) and China (5,300 mt).

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




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