DTN Midday Livestock Comments          06/09 11:32

   Friday's WASDE Report Doesn't Bring Much New News to the Livestock Complex

   Heading into Friday afternoon, traders will continue to watch for more cash 
cattle trade to develop in the South as receipts are still light there.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   The livestock complex is trending mostly higher into Friday's noon hour as 
the midmorning WASDE report didn't create any shake-up in the market and as 
traders continue to note the strong nature of the cash cattle complex. July 
corn is down 10 1/2 cents per bushel and July soybean meal is down $5.50. The 
Dow Jones Industrial Average is up 8.38 points.

LIVE CATTLE:

   The live cattle complex is back to trading higher as traders take the 
momentum built in the cash cattle complex as a solid reason why to again 
advance the contracts. June live cattle are up $0.85 at $179.62, August live 
cattle are up $0.12 at $172.10 and October live cattle are up $0.35 at $175.05. 
Helping this week's market aside from the tremendous gains seen in the cash 
complex has been the continued upward trend of boxed beef prices. The cash 
cattle market has seen a little more business develop in the South as packers 
didn't get enough cattle bought Thursday afternoon. There's been another 
roughly 1,000 head traded in Kansas for $186, which is roughly $1.00 higher 
than what the bulk of the cattle traded for on Thursday. Thursday afternoon 
Southern live cattle traded for $184 to $191, but mostly at $185 which is $7.00 
to $8.00 higher than the previous week's weighted average. Northern dressed 
cattle have traded for $290 to $304 this week, but mostly at $300 which is 
$10.00 higher than last week's weighted average.

   Friday's WASDE report was supportive of the beef and cattle markets, 
although it didn't share much new news to speak of. Beef production for 2023 
was raised slightly as throughput is expected to remain snappy on both fed and 
non-fed cattle classes. 2023 beef production grew by 165 million pounds from 
last month's report. Quarterly steer prices were raised from last month as 
relentless beef demand and thin supplies continue to push the cash market to 
new all-time highs. For 2023 the second quarter is estimated to average $179 
which is $7.00 higher than last month, the third quarter is expected to average 
$173 which is $9.00 higher than last month, and the fourth quarter is expected 
to average $174 which is $5.00 higher than last month. There were no changes 
made to beef imports or exports compared to a month ago.  2023 beef imports are 
expected to total 3,501 million pounds, and exports are expected to total 3,224 
million pounds.

   Boxed beef prices are higher: choice up $2.25 ($330.98) and select up $2.47 
($306.57) with a movement of 56 loads (32.20 loads of choice, 11.97 loads of 
select, 4.10 loads of trim and 7.39 loads of ground beef).

FEEDER CATTLE:

   At the nearby corn contracts rally $0.07 to $0.09 lower, the feeder cattle 
market hasn't wasted any time regaining some position that it had lost earlier 
in the week. The frustrating thing about this past week's market has been that 
traders seem null to just how strong and robust the cattle market's 
fundamentals are. Whether you look to the prices gained in the cash cattle 
market or the relentless nature of the feeder cattle complex -- the market's 
fundamentals are clear: demand is incredibly high and there simply aren't 
enough cattle to go around. But even so, earlier this week traded elected to 
focus on outside pressures despite all the optimism that engulfs the cattle 
complex. But thankfully come Friday, traders are seeming to have a slightly 
different approach to the market as the nearby feeder cattle contracts are all 
trading well above $1.00 higher. August feeders are up $1.30 at $239.97, 
September feeders are up $1.55 at $243.02 and October feeders are up $1.15 at 
$244.60.

LEAN HOGS:

   The lean hog complex is trading mostly higher although a few of its deferred 
contracts are trading just below steady. July lean hogs are up $1.42 at $88.62, 
August lean hogs are up $0.82 at $83.25 and October lean hogs are up $0.40 at 
$74.85. The cash hog market took a drastic turn this morning as prices are 
trading over $8.00 lower and there haven't even been 1,000 head traded. This 
change in behavior from packers isn't all that unexpected as they were 
aggressive in the week early on -- even on Monday. But even so, traders are 
supporting the lean hog complex into Friday's noon hour as they hope that the 
midday's strong carcass prices remain a factor in the afternoon close as well.

   Friday's WASDE report could be viewed as neutral for the hog and pork 
markets. Pork production for 2023 was slightly lower as although processing 
speeds continue to be vigorous, carcass weights have declined. 2023 pork 
production was decreased by 5 million pounds from last month's report. 
Quarterly hog prices remained unchanged from a month ago except in the second 
quarter of 2023 which saw a $1.00 price increase to now average $57, the second 
quarter remained steady at $60 and the third quarter remained steady at $55. 
2023 pork imports remained steady at 1,069 million pounds, but 2023 exports did 
increase by 300 million pounds to now total 6,803 million pounds.

   The projected lean hog index for 6/8/2023 is up $0.48 ($84.28) and the 
actual index for 6/7/2023 is up $0.76 at $83.80. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $8.82 with a weighted average price of 
$85.25, ranging from $81.50 to $90.00 on 878 head and a five-day rolling 
average of $90.61. Pork cutouts total 204.81 loads with 192.06 loads of pork 
cuts and 12.75 loads of trim. Pork cutout values: up $3.74, $89.42.

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

   **

   At 12:30 p.m., DTN Lead Analyst Todd Hultman will review details of the 
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