DTN Midday Livestock Comments          05/24 12:09

   Hog Prices Tumble Late Friday

   Lean hog futures are posting sharp triple-digit losses late Friday based on 
increased market pressure developing ahead of Memorial Day weekend. Early 
support in cattle futures has eroded with traders selling ahead of the cattle 
on feed report.

By Rick Kment
DTN Analyst

General Comments

   Strong pressure has continued to develop in hog trade with triple-digit 
losses quickly developing late Friday. This may add increased long-term 
pressure ahead of the long holiday weekend. Corn futures are higher in moderate 
trade. July corn futures are 11 cents higher. Stock markets are higher in light 
trade. Dow Jones is 109 points higher with NASDAQ up 33 points. 

   LIVE CATTLE:

   Live cattle futures are steady to moderately lower with increased pressure 
developing in all but front-month June futures. Growing concern of expected 
growth in cattle on feed numbers is causing traders to take protection in front 
of the report and long holiday weekend. With markets closed Monday, traders 
will have to wait until Tuesday before reacting to the report, which may add 
increased volatility through the entire complex. Cash cattle trade remained 
quiet with no additional bids seen Friday. Cash trade is expected to be done 
for the week in all areas, with prices steady to $2 per cwt lower than last 
week. Boxed Beef cut-outs at midday are higher, $1.95 higher (select) and up 
$0.71 per cwt (choice) with light movement of 64 total loads reported (28 loads 
of choice cuts, 13 loads of select cuts, 12 loads of trimmings, 11 loads of 
ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have moved firmly lower in late day trade with prices 
22 to 90 cents per cwt lower as traders prepare for the upcoming cattle on feed 
report. Expectations that sharp increases in cattle placements will be seen in 
the afternoon cattle on feed report has eroded any previous support and added a 
weaker market trend.

   LEAN HOGS: 

   Active pressure has quickly moved into lean hog futures trade through the 
last couple hours of trade Friday. The concern that markets will remain closed 
over the next three days is sparking increased uncertainty through the entire 
lean hog complex surrounding the relationship between the U.S. and China. Even 
though volume in the complex remains extremely light late Friday, the focus on 
market protection is pushing prices $2 to $2.50 per cwt lower at the end of the 
week. Cash prices are lower on the National Direct morning cash hog report. The 
weighted average price is down $2.52 at $77.96 per cwt with the range from 
$72.00 to $78.53 on 5,095 head reported sold. Cash prices unreported due to 
confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork 
values continued higher following strong gains in rib primal cuts. Pork cutouts 
added $0.90 per cwt at $83.52 per cwt with 167 loads traded. Lean hog index for 
5/22 is $84.36, down 0.03, with a projected two-day index at $84.02, down 0.34.

   Rick Kment can be reached at rick.kment@dtn.com 


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