GENERAL COMMENTS:
Mondays are never especially easy, but when you close one week fully higher and come into the next week fully lower, it seems a little more disappointing than just a typical lackadaisical Monday. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.80 with a weighted average of $36.72 on 8,443 head sold. July corn is down 3/4 cent per bushel and July soybean meal is down $0.50. The Dow Jones Industrial Average is down 109.33 points and NASDAQ is up 71.02 points.
LIVE CATTLE:
Live cattle contracts closed fully lower but didn't fall quite as low as the feeder cattle contracts did. June live cattle closed $1.97 lower at $92.67, August feeders closed $3.00 lower at $97.20 and October feeders closed $3.00 lower at $101.27. There was some light trade that developed in Texas, but certainly not enough to develop a trend for the week. Bids and asking prices have yet to develop and realistically the industry remains pretty quiet, which isn't a comforting sound coming off a stronger week. New showlists appear to be somewhat higher in Nebraska/Colorado and higher in Texas and Kansas. Monday's slaughter is estimated at 86,000 head, 11,000 head more than a week ago and 33,000 head less than a year ago. Last week's negotiated cash cattle purchased totaled 69,064 head all for the one-to-14 day delivery.
Boxed beef prices closed higher: choice up $7.70 ($468.58) and select up $3.98 ($452.97) with a movement of 134 loads (70.23 loads of choice, 21.10 loads of select, and 29.31 loads of trim, and 13.37 loads ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. There's some worry that with boxed beef prices starting to top (or appearing to top) that cash cattle prices will weaken when boxed beef prices fall. And with a built-up supply of backlogged cattle, packers won't have to worry about competing to find what they need.
FEEDER CATTLE:
Feeder cattle contracts closed $2.00 to $4.00 lower but thankfully the runs of feeder cattle offered at sale barns seemed mostly unaffected.
At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, steer and heifer calves as well as yearling steers and heifers under 650 pounds sold for $3.00 to $8.00 higher, while steers over 800 pounds and heifers over 650 pounds sold $1.00 to $5.00 higher. May feeders closed $4.25 lower at $123.65, August feeders closed 4.27 lower at $132.67 and September feeders closed $4.10 lower at $134.05. The CME feeder cattle index 5/8/2020: up $1.46, $122.60.
LEAN HOGS:
The lean hog complex was able to sneak through Monday's close with only moderate losses. June lean hogs closed $1.42 lower at $60.27, July lean hogs closed $1.25 lower at $60.47 and August lean hogs closed $1.17 lower at $59.25. Though the market was still lower, it was positive to see packers come in and buy over 8,000 head of hogs Monday afternoon. Pork cutouts totaled 398.07 loads with 358.43 loads of pork cutouts and 39.63 loads of trim. Pork cutout values: up $5.16, $121.66. Monday's slaughter is estimated at 357,000 head, 82,000 head more than a week ago and 101,000 head less than a year ago. The CME lean hog index 5/7/2020: up $0.82, $67.00.
TUESDAY'S CASH HOG CALL: Steady. Like I've mentioned before, even with packers buying more hogs and increasing slaughter speeds, it will be hard for the market to act too bullishly as the built-up supply of hogs that need to be processed continues to grow. Until the market is current and has successfully processed all of that pent-up inventory, the market has little room for major positive leaps on the cash side, unfortunately.
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