Monday Morning Livestock Market Summary

GENERAL COMMENTS:

Light to moderate trade developed in all areas of cattle country late Friday afternoon with prices generally higher than the previous week. The overall tone of the market continues to draw buyer support back into the market with the most momentum seen in the North as prices were seen steady to $4 per cwt higher. Prices in the South were listed at $1 lower to $1 per cwt higher. Generally live basis prices were seen at $134 to $137 with most prices at $136 to $137 per cwt. Prices in the North were seen at $216 to $220 with most sales at $218 to $220 per cwt. Futures trade is expected to remain mixed follow the late-week pressure which developed. Follow-through selling and early-week short covering is likely to step back into the market although initial volume is likely to remain sluggish through the entire complex.

Packers are expected to focus on early bids steady to $1 per cwt higher Monday following additional aggressive fundamental support that will likely carry through the weekend break. The expectation that packers runs will quickly move back to a full schedule of 440,000 head with most lean hog prices expected to be steady to 50 cents higher early Monday morning will create additional buyer support through the complex. This may spark additional support through lean hog futures during early week trade following the strong support which developed Friday. The move to contact highs at the end of the week could create some early-week position taking, but the combination of technical and fundamental support is expected to spark longer term market support.

	BULL SIDE		BEAR SIDE
1)	Firming cash cattle support during late-week trade helped to draw additional market activity back into the complex. This stimulated additional longer-term activity and is likely to put increased focus on the ability to sustain additional beef value support. The ability to move futures higher early in the week could help to bring additional buyer activity back into the market later in the week.	1)	Strong pressure seen in feeder cattle trade during the week created extreme market shifts. Although prices were able to rally back through much of the week, the inability to hold prices higher, creates significant concern and may cause some traders to quickly back away from positions through the rest of the month. Live cattle futures weakened late last week despite the firm support in cash cattle trade. The inability to draw buyers back into the market is creating concern that buyer support may be starting to quickly wane through the early summer months.
2)	Continued firm buyer support in boxed beef values on the cutout reports has helped to draw additional support to wholesale beef markets through the month of June. The choppy moves in futures trade and uncertainty in cash markets has limited overall movements in beef values, but sustained support has continued to develop through early summer. This may continue to develop during the next few days with increased buyer support likely to move into the market.	2)	Strong pressure seen in feeder cattle trade during the week created extreme market shifts. Although prices were able to rally back through much of the week, the inability to hold prices higher, creates significant concern and may cause some traders to quickly back away from positions through the rest of the month.
3)	Summer contracts have set new contract highs with prices posting moderate gains Friday. This pushed June through August futures above $82 per cwt with prices focused on continued market support over the near future. There is expected to be additional longer-term support over the near future gains expected in both near and deferred contracts during early week trade.	3)	Pork values eroded through the end of the week with a strong tumble lower in the loin and rib markets. These markets are typically strong summer markets, but with the recent market pressure seen in the complex, there continues to be some uncertainty in the complex. Additional softness may quickly redevelop across the complex. This could limit additional softness in the market and lead the complex lower through the coming week based on just a couple primal market moves.
4)	Continued strong cash price support is developing through the market with early expectations of bids steady to $1 per cwt Monday. The ability for packers to gain access to the number of hogs that they need to fill needed procurement schedules will require continued higher money over the next few days as supplies continue to tighten.	4)	Despite the strong moves in front-month summer contracts, the wide spread between the August and October contracts continues to remain wide. This lack of overall support in all deferred contracts is limiting buyer activity in many of these contracts with most of the focus on summer markets at this point. It is uncertain if additional activity will move back to these markets over the next couple of weeks, or if prices will stay focused on the June through August contracts during the month of June.