GENERAL COMMENTS:
All three livestock contracts rallied through closing, ending the day substantially higher for the start of the week. Boxed beef values and pork cutouts are trying to wade through this new era as prices start to correct and slaughter continues to grow. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.98 with a weighted average of $36.83 on 6,853 head sold. July corn is up 1 cent per bushel and July soybean meal is down $0.20. The Dow Jones Industrial Average is up 529.95 points and NASDAQ is up 15.63 points.
LIVE CATTLE:
Live cattle contracts closed higher and moved the market closer to that $100 resistance plane in nearby contracts. June live cattle closed $1.70 higher at $99.40, August live cattle closed $1.92 higher at $99.25 and October live cattle closed $2.22 higher at $101.62. Wednesday will be interesting, as the trade will fight immense resistance if the market chooses to rally and build upon what Tuesday established. Cash cattle trade, oddly enough, developed Tuesday despite it being the first trading day of the week. Cattle in Iowa sold dressed for $174 to $190, dressed cattle in Nebraska sold for $180 to $190 and live cattle sales in Kansas sold anywhere from $1.10 to $1.20. Tuesday's slaughter is estimated at 106,000 head, 7,000 head more than a week ago and 16,000 head less than a year ago.
The USDA National Weekly Direct Slaughter Cattle -- Negotiated Purchases report shared that last week packers bought 83,504 head; 79,411 were bought for delivery in the next two weeks while the remaining 4,093 head were bought for delivery in 15 to 30 days.
Boxed beef prices close lower: choice down $11.25 ($385.49) and select down $14.16 ($360.02) with a movement of 222 loads (136.84 loads of choice cuts, 28.85 loads of select, 15.82 loads of trim and 40.80 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Seeing that the market has already been tested, trade will most likely stay within the parameters set.
FEEDER CATTLE:
Feeder cattle contracts rallied all throughout the day and closed substantially higher, $3.00 to $4.50 higher throughout the complex. August feeders closed limit higher at $133.30, September feeders closed $4.27 higher at $134.42 and October feeders closed $4.07 higher at $135.32. The day's closing jumped over the 40-day moving average ($120.81) and the 100-day moving average ($129.37). At Blue Grass Stockyards in Lexington, Kentucky, compared to last week, feeder steers under 700 pounds sold $3.00 to $5.00 higher with good demand for weaned cattle. Feeder heifers sold steady to $2.00 higher with stronger demand again for cattle that had been weaned for some time. Slaughter cows and slaughter bulls sold steady with good demand and yearlings sold steady. The CME feeder cattle index 5/22/2020: up $0.72, $126.96.
LEAN HOGS:
Lean hog contracts, though unsure at the start of the day, rallied around the noon hour and closed higher to end the day. June lean hogs are up $1.72 at $60.50, July lean hogs are up $3.67 at $59.57 and August lean hogs are up $2.87 at $57.15. Hog cutout values bounced around trying to find a new stage of normal as hog slaughter continued to slowly rebuild.
Pork cutouts total 396.30 loads with 369.05 loads of pork cuts and 27.25 loads of trim. Pork cutout values: up $0.69, $97.44. Tuesday's slaughter is estimated at 405,000 head, 8,000 head more than a week ago and 72,000 head less than a year ago. The CME lean hog index 5/21/2020: down $1.14, $63.45.
WEDNESDAY'S CASH HOG CALL: Steady. As packers continue to sift through inventory, trying to add more each day, the built-up supply continues to outweigh demand.
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