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DTN Midday Livestock Comments 05/12 11:41
Livestock Contracts Dip Lower Tuesday
Bids have been renewed in the cash cattle market, but no new trade has
developed at this point Tuesday.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
It's been a whiplash type of a day already for the cattle contracts and
traders are now letting the contracts fall lower upon fearing what headline
could pop up next. Bids have been renewed in the cash market, but no new trade
has developed. July corn is up 2 1/4 cents per bushel and July soybean meal is
up $2.70. The Dow Jones Industrial Average is down 161.19 points and NASDAQ is
down 446.96 points.
LIVE CATTLE:
It's been a highly political, topsy-turvy Tuesday morning for the cattle
complex following Monday's mayhem day of trading where it was reported the
Trump administration was going to roll back tariffs on beef imports from all
major beef exporting countries. However, then news broke Tuesday morning that
the administration paused that train of thought and doesn't intend to do so in
the immediate future. Needless to say, upon hearing the news Tuesday morning
that tariffs would remain in place, the cattle contracts shot higher, but are
now entering into Tuesday's noon hour mostly lower after being fatigued from
the back-and-forth, emotionally charged changes. June live cattle are steady at
$249.40, August live cattle are down $1.00 at $242.55 and October live cattle
are down $1.27 at $235.40. A few bids have been renewed in the cash cattle
market, but no new trade has developed following Monday's light business.
On Monday, mandatory reports shared some light trade was noted in all major
feeding states with Northern dressed deals marked at $400, $2 to $3 lower than
last week's weighted averages. Southern live sales came in at $260, $3 higher
than last week's weighted averages.
Tuesday's WASDE report shared mixed news for the cattle and beef markets of
2026. Beef production for 2026 was 243 million pounds as slower marketings of
fed cattle have affected throughput and cull cow slaughter is lighter than
years past as well. Quarterly steer prices were increased substantially from
last month as the cash market continues to rally and trade far higher than was
originally assumed, Steers in the second quarter are now expected to average
$253 (up $12.00 from last month); steers in the third quarter are expected to
average $252 (up $10.00 from last month); and steers in the fourth quarter are
expected to average $255 (up $10.00 from last month). Beef imports increased by
319 million pounds and beef exports fell by four million pounds from last
month's projections.
Boxed beef prices are higher: choice up $0.67 ($391.89) and select up $2.82
($394.31) with a movement of 48 loads (37.34 loads of choice, 5.15 loads of
select, zero loads of trim and 5.84 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts are also trading lower into Tuesday's noon hour
as the market is skeptical of what headline could pop up next. May feeders are
down $1.42 at $366.97, August feeders are down $2.72 at $359.67 and September
feeders are down $3.12 at $357.02. Until the live cattle contracts show more
confidence, the feeder cattle contracts will likely continue to trade lower.
LEAN HOGS:
The lean hog contracts are trading lower into Tuesday's noon hour as well as
the market simply isn't seeing the stable support it needs. Before traders will
confidently push the contracts higher, they're going to need to see more
support from consumers. June lean hogs are down $1.30 at $98.92, July lean hogs
are down $1.40 at $103.25 and August lean hogs are down $1.42 at $104.27. The
projected CME Lean Hog Index for 5/11/2026 is up $0.06 at $90.48, and the
actual index for 5/8/2026 is down $0.38 at $90.41. Hog prices on the Daily
Direct Morning Hog Report average $94.93, ranging from $91.00 to $96.00 on
3,516 head and a five-day rolling average of $94.85. Pork cutouts total 209.81
loads with 187.24 loads of pork cuts and 22.57 loads of trim. Pork cutout
values: down $0.78, $96.20.
Tuesday's WASDE report shared mixed news for the hog and pork markets of
2026. Pork production for 2026 was increased by 10 million pounds as production
in the second half of the year is expected to be greater than what the industry
has currently seen. The quarterly price projection for hogs was mixed as hogs
in the second quarter of 2026 are now expected to average $71 (down $1.00 from
last month); hogs in the third quarter are now expected to average $74 (down
$1.00 from last month); and hogs in the fourth quarter are now anticipated to
average $64 (down $1.00 from last month). Pork imports for 2026 fell by 12
million pounds but pork exports grew by 32 million pounds.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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