GENERAL COMMENTS:
To start, Tuesday wasn't sure if the support building throughout the market was strong enough to rally prices higher -- but as the day progressed and substantial support developed more and more, all three livestock contracts closed higher, and their energy even carried into the cash markets. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.46 with a weighed average of $37.31 on 4,863 head sold. July corn is up 5 cents per bushel and July soybean meal is up $3.10. The Dow Jones Industrial Average is down 74.69 points and NASDAQ is up 4.22 points.
LIVE CATTLE:
Live cattle contracts rallied through closing, topping out limit higher in nearby contracts and well over $1.00 gains throughout the rest of the complex. June live cattle closed $4.50 higher at $97.17, August live cattle closed $4.50 higher at $101.70 and October live cattle closed $2.90 higher at $104.17. Some more light trade was reported throughout the day, most definitely higher but not enough to set the complete tone for the week. Iowa reported some dressed cattle at $185, $19 higher than last week's weighted average, and Kansas reported some at $110, $2.00 higher than last week's average. Tuesday's slaughter is estimated at 89,000 head, 9,000 head more than a week ago and 33,000 head less than a year ago.
Boxed beef cutouts closed mixed: choice up $6.81 ($475.39) and select down $2.00 ($450.97) with a movement of 132 loads (64.28 loads of choice, 27.92 loads of select, 14.13 loads of trim and 25.92 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to slightly stronger. How the Fed Cattle Exchange will perform is questionable as packers don’t like to participate in its auction, but given that the market has already been able to push cash prices higher this early in the week leaves one feeling confident about the later part of the week as slaughter continues to inch higher.
FEEDER CATTLE:
Feeder cattle contracts only grew stronger with support from the noon hour into closing, and successfully led most of the contracts to close $3.00 higher. Heading into the middle of the week, the board will have a decision to make -- Monday's trade was lower, Tuesday's trade closed higher, and now traders look at their positions and contemplate if the market has advanced enough for the beginning stages of the week or will the momentum be robust enough to carry into Wednesday, and potentially Thursday and Friday? Time will tell, but as the entire complex grows stronger with ambitious cash markets -- good things could be in store. On a big run of feeder cattle at Ozark Regional Stockyards in West Plains, Missouri, feeder cattle compared to last week traded $4.00 to $8.00 higher. The quality of cattle was commendable, and with the board's encouragement, buyers were willing to step up and buy. The CME feeder cattle index 5/11/2020: not available at this time.
LEAN HOGS:
With the rest of the market rearing to trade higher, and slaughter gradually picking up speed, the lean hog market opted to trade higher and managed to do so through closing. June lean hogs closed $1.05 higher at $61.32, July lean hogs closed $1.00 higher at $61.47 and August lean hogs closed $0.87 higher at $60.12. Pork cutouts totaled 412.09 loads with 374.89 loads of pork cuts and 37.20 loads of trim. Pork cutout values: down $8.84, $112.82. Tuesday's slaughter is estimated at 361,000 head, 63,000 head more than a week ago and 94,000 head less than a year ago. The CME lean hog index 5/8/2020: down $1.25, $65.75.
WEDNESDAY'S CASH HOG CALL: Slightly higher. With slaughter continuing to pick up its pace and optimism starting to penetrate the marketplace, the cash lean hogs have a fair shot at trading higher.
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