DTN Midday Livestock Comments          05/12 11:51

   The Livestock Contracts Gap Higher Monday

   Traders are actively pushing the livestock contracts higher Monday as 
support is plentiful early this week. 

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   The livestock complex is rocking and rolling as all three of the markets are 
trading higher. New showlists appear to be lower in all major feeding states. 
May corn is up 2 1/2 cents per bushel and May soybean meal is up $2.90. The Dow 
Jones Industrial Average is up 915.57 points and NASDAQ is up 659.77 points.

LIVE CATTLE:

   The live cattle complex is thrilled to be trading even higher Monday as the 
announcement that Mexican cattle imports have again been halted because of the 
continued spread of New World screwworm (NWS) has sent the contracts notably 
higher. But what's potentially most interesting to note about the contracts 
just before Monday's noon hour is that it isn't the immediate/nearby contracts 
that are seeing the biggest gains -- it's the late spring/early summer 2026 
contracts that are seeing the biggest daily push as they're currently trading 
over $2.00 higher. Which is likely because traders recognize that supplies may 
be thin now, but they're going to be even tighter next year at this time. June 
live cattle are up $1.90 at $216.55, August live cattle are up $1.85 at $211.42 
and October live cattle are up $1.67 at $208.62. New showlists appear to be 
lower in all major feeding states.

   Last week, Southern live cattle traded at mostly $219 to $220, which is 
$1.00 to $2.00 higher than the prior week's weighted average. Northern dressed 
cattle traded at mostly $355, which is $6.00 higher than the previous week's 
weighted average.

   Monday's WASDE report shared mixed news for the cattle and beef markets of 
2025. Beef production for 2025 was decreased as larger carcass weights are more 
than offsetting the decrease in production in terms of the number of head 
processed. Beef production for 2025 was decreased by 277 million pounds 
compared to a month ago. Compared to last month's estimates, the quarterly 
price projections were changed drastically upon seeing the recent price uptick 
in the fed cash cattle market. Steers in the second quarter of 2025 are 
expected to average $217 (up $13 from last month), steers in the third quarter 
of 2025 are expected to average $216 (up $10 from last month) and steers in the 
fourth quarter of 2025 are expected to average $220 (up $13 from last month). 
Beef imports were increased by 212 million pounds compared to last month's 
estimates (and yes, this report does take into account the ban on Mexican 
cattle imports currently), but beef exports were decreased by 22 million pounds.

   Boxed beef prices are higher: choice up $1.95 ($347.92) and select up $2.60 
($333.77) with a movement of 69 loads (46.08 loads of choice, 3.85 loads of 
select, 4.38 loads of trim and 14.70 loads of ground beef).

FEEDER CATTLE:

   Upon being given the opportunity to trade the announcement that Mexican 
cattle imports will be halted for 15 days because of the continued spread of 
New World screwworm, traders didn't waste any time gapping the feeder cattle 
contracts higher at Monday's start. DTN Senior Livestock Editor Jennifer 
Carrico, wrote about the newsbreak this weekend, which can be read here: 
https://www.dtnpf.com/agriculture/web/ag/news/article/2025/05/12/nws-moves-north
-mexico-rollins-us.

   May feeders are up $3.60 at $301.57, August feeders are up $4.25 at $304.55 
and September feeders are up $4.27 at $303.30. Even without the added market 
buzz surrounding the boarder closure, it's likely that the feeder cattle 
complex would have traded at least steady following last week's bullish gains. 
However, this breaking news has obviously grabbed the markets and traders' full 
attention.

LEAN HOGS:

   Although, the cattle complex is seeing the greatest advancement, the lean 
hog complex is currently trading higher as well. June lean hogs are up $0.77 at 
$98.32, July lean hogs are up $1.80 at $102.22 and August lean hogs are up 
$1.75 at $100.87. The market still isn't comfortable facing its resistance 
pressure around the $100 market in the spot June contract -- but even so, the 
market still is trading higher and has even more room to trade higher before 
that threshold becomes an issue.

   The projected lean hog index for 5/9/2025 is down $0.07 at $89.92 and the 
actual index for 5/8/2025 is down $0.08 at $89.99. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $0.45 with a weighted average price of 
$94.33, ranging from $88.00 to $98.00 on 2,466 head and a five-day rolling 
average of $94.12. Pork cutouts totaled 168.15 loads with 152.91 loads of pork 
cuts and 15.24 loads of trim. Pork cutout values: down $0.49, $97.34.

   Monday's WASDE report shared mixed news for the hog and pork markets of 
2025. Pork production for 2025 was decreased by 79 million pounds as processing 
speeds in the second half of the year aren't expected to be as aggressive. Hog 
prices also saw an increase from last month's projections as hogs in the second 
quarter of 2025 are expected to average $68 (up $5.00 from last month), hogs in 
the third quarter are expected to average $71 (up $6.00 from last month) and 
hogs in the fourth quarter of 2025 are expected to average $60 (up $4.00 from 
last month). Pork imports for 2025 were increased by 15 million pounds, and 
pork exports for 2025 were increased by 103 million pounds.

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




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