DTN Midday Livestock Comments          04/22 11:42

   High Corn Sends Cattle Screaming Lower

   A sharp spike in corn prices sent the cattle contracts spiraling lower 
Thursday as input costs are alarmingly high. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   Thanks to the rally in the corn market, cattle futures have nose-dived lower 
and are only feeling the pressure build as time goes on. Meanwhile, lean hog 
futures are trying to keep their upward rally, though there is some pressure 
building in the nearby contracts. May corn is up 25 cents per bushel and July 
soybean meal is up $9.80. The Dow Jones Industrial Average is down 51.74 points 
and NASDAQ is up 30.78 points.

   LIVE CATTLE:

   It's been a rough day for cattle futures and even though the live cattle 
market isn't seeing sharp losses like the feeder cattle contracts, their 
inability to rally a higher cash cattle market is equally as painful. April 
live cattle are down $1.45 at $118.32, June live cattle are down $1.00 at 
$116.30 and August live cattle are down $1.02 at $116.92. Even though this 
week's slaughter is running aggressively and most likely going to be around 
650,000 to 660,000 head and boxed beef prices are higher than a year ago -- 
feedlots don't hold enough leverage in the current market to move the cash 
cattle market higher regardless of what the fundamentals are. Light trade has 
developed in the North at $192, which is $4.00 lower than a week ago and bids 
of $118 have surfaced in Kansas. Asking prices are around $121 to $122 in the 
South and $196 plus in the North.

   Beef net sales of 24,600 metric tons (mt) reported for 2021 were up 57% from 
the previous week and 38% from the prior 4-week average. The three largest 
buyers were South Korea (7,800 mt), Japan (6,200 mt) and China (3,100 mt).

   Boxed beef prices are higher: choice up $0.93 ($281.39) and select up $2.91 
($274.79) with a movement of 63 loads (33.94 loads of choice, 14.65 loads of 
select, 5.21 loads of trim and 9.04 loads of ground beef).

   FEEDER CATTLE:

   Pain, sheer pain is what the feeder cattle complex is experiencing as May 
corn rallies 25 cents to $6.50 per bushel and July corn rallies the same amount 
to $6.31. With corn prices making hellacious jumps day in and day out, the 
feeder cattle contracts have been trading lower; but Thursday trade is sending 
the contracts sharply lower. May feeders are down $3.80 at $135.80, August 
feeders are down $4.22 at $147.70 and September feeders are down $3.87 at 
$150.07. Until the corn market stabilizes or begins to fall lower, the feeder 
cattle contracts don't have much ground to stand on as the live cattle complex 
isn't having luck at rallying cash cattle prices.

   LEAN HOGS:

   As the noon hour approaches, the lean hog contracts are seeing a little more 
resistance building in their nearby contracts while the deferred contracts 
still rally modestly. June lean hogs are down $0.12 at $104.57, July lean hogs 
are up $0.37 at $103.37 and August lean hogs are up $0.60 at $99.92. Initially 
looking at the weekly export report, a marketing year low wasn't all that 
surprising as we expected exports to be lower amid such high pork prices. But 
seeing China back to buy again and seeing the data correction note that there 
was some data not properly reported in 2020, the report hasn't bearishly 
undermined the market and strong fundamental undertones still remain.

   Pork net sales reductions of 22,100 mt reported for 2021 -- a marketing year 
low -- were down noticeably from both the previous week and prior 4-week 
average. The three largest buyers were China (13,100 mt), Japan (2,700 mt) and 
South Korea (1,500 mt). Data correction note, "Due to an error in exporter(s) 
reporting, exports of 54,476 mt of pork were not reported properly in marketing 
year 2020. To correct marketing year 2021 figures a cancelation of 54,476 mt 
has been reported this week to remove the portion that should have been 
reported in 2020."

   The projected CME Lean Hog Index for 4/21/2021 is up $0.87 at $105.99 and 
the actual index for 4/20/2021 is up $0.70 at $105.12. Hog prices are higher on 
the National Direct Morning Hog Report, up $0.75 with a weighted average of 
$105.72 ranging from $104.00 to $113.00 on 3,987 head and a five-day rolling 
average of $104.39. Pork cutouts total 207.51 loads with 180.86 loads of pork 
cuts and 26.65 loads of trim. Pork cutout values: up $0.56, $114.20.

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




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