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DTN Midday Livestock Comments          05/11 11:43

   Feeder Cattle and Corn Keep Going Rounds

   The feeder cattle contracts were trying to keep their head above water and 
stand their ground, but the corn market's rally simply grew to be too strong.

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The livestock complex heads into Tuesday's afternoon mixed as the market has 
support and pressure stemming from many different angles in the various 
contracts. The biggest change since Monday's trade is that the corn market has 
again decided that it's going to rally and has consequently sent feeder cattle 
contracts tumbling lower. July corn is up 18 3/4 cents per bushel and July 
soybean meal is up $7.10. The Dow Jones Industrial Average is down 491.62 
points and NASDAQ is down 44.08 points.

   LIVE CATTLE

   Even though the feeder cattle contracts are diving lower, the live cattle 
contracts are keeping their gains. If this type of encouragement continues, the 
market may even be able to have a positive influence on this week's cash cattle 
trade. June live cattle are up $0.07 at $118.30, August live cattle are up 
$0.75 at $121.10 and October live cattle are up $0.90 at $125.45. The market 
has every reason to trade higher with soaring beef prices, loyal consumers and 
lots of room to trade before the market nears resistance again. The cash cattle 
market has yet to test the waters this week and maybe, just maybe, feedlots 
will have a chance at keeping prices at least steady if both the board and 
boxes continue to trade higher. Asking prices in the South have been noted at 
$120, and the North has yet to share their asking price.

   Boxed beef prices are higher: choice up $2.84 ($311.95) and select up $2.59 
($296.35) with a movement of 58 loads (35.18 loads of choice, 5.75 loads of 
select, 3.63 loads of trim and 13.28 loads of ground beef).

   FEEDER CATTLE

   Signing up to keep tabs on the feeder cattle market feels a lot like signing 
up to test a never-ending roller coaster that has the biggest twists and turns 
ever seen. Corn prices shoot higher, feeder cattle crash lower; corn prices 
shoot lower, cattle scamper higher -- and the drastic nature of the changes is 
never mild. Earlier Tuesday morning, the feeder cattle contracts were trying to 
hold onto to the momentum that Monday's market successfully held, but as the 
corn market quickly gained traction and jumped to $0.18 to $0.22 higher in the 
nearby contracts, the feeder cattle market lost its gusto rather quickly. May 
feeders are down $0.60 at $134.85, August feeders are down $0.17 at $148.50 and 
September feeders are down $0.12 at $149.95.

   LEAN HOGS

   The lean hog market is still scaling lower as traders are slow to enter the 
market this week, but demand is roaring and it's showing through the market's 
fundamentals. June lean hogs are down $0.87 at $111.22, July lean hogs are down 
$1.27 at $111.42 and August lean hogs are down $1.30 at $106.80. With cash 
prices up a significant $2.41 on nearly 6,000 hogs at only the midday report, 
packers are back to buying up supplies and have intentions to run chain speeds 
so long as they have the pork to process. Some may look at the boards doggish 
trade and find it hard to believe that the market's fundamentals are doing one 
thing while the market's technical sector does another, but we must remember 
that when the prices get as lofty as they are, choppy up and down trade is 
expected.

   The projected lean hog index for May 10 is up $0.63 at $110.73, and the 
actual index for May 7 is up $0.88 at $110.10. Hog prices are higher on the 
National Direct Moring Hog Report, up $2.41 with a weighted average of $111.71, 
ranging from $105.76 to $125.00 on 5,703 head and a five-day rolling average of 
$111.65. Pork cutouts total 199.65 loads with 189.61 loads of pork cuts and 
10.04 loads of trim. Pork cutout values: up $0.55, $113.71.

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




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