GENERAL COMMENTS:
Monday came and went mostly uneventful as the day traded steady with how it opened. The lean hog complex took advantage of optimism in the market and the opportunity to rally, as slaughter speeds are running efficiently. Meanwhile, both cattle contracts are anxious to see how cash cattle will develop. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.32 with a weighted average of $30.82 on 5,651 head sold. July corn is up 2 1/2 cents per bushel and July soybean meal is down $0.70. The Dow Jones Industrial Average is up 461.46 points and NASDAQ is up 110.66 points.
LIVE CATTLE:
Live cattle contracts closed mostly lower, though nearby contracts closed modestly higher. June live cattle closed $0.22 higher at $94.12, August live cattle closed $0.15 higher at $96.32 and October live cattle closed $0.07 higher at $99.37. Boxed beef had a phenomenal movement selling upwards of 223 loads, which is encouraging as beef demand was belittled when prices were astronomical and consumers faced severe sticker shock. A light run of cash cattle developed in parts of Nebraska for lower money, selling for $170.00, though there wasn't enough trade to develop a substantial trend for the week. Monday's slaughter is estimated at 117,000 head, 7,000 head more than a week ago and 2,000 head less than a year ago.
Boxed beef prices close lower: choice down $6.90 ($254.58) and select down $15.30 ($231.12) with a movement of 223 loads (146.71 loads of choice, 39.05 loads of select, 15.45 loads of trim and 21.99 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Lower. As boxed beef prices continue to plunge lower, cash cattle prices are going to be hard-pressed in the next weeks to come.
FEEDER CATTLE:
Feeder cattle contracts didn't see the point in trading higher throughout Monday as live cattle contracts were split and cash trade is expected to develop at lower money. Thankfully the board's bearish attitude didn't trickle into the feeder cattle market, though buyers were adamant about peeling steers out of the bunch before they looked at heifers. August feeders closed $1.10 lower at $133.07, September feeders closed $0.95 lower at $134.52 and October feeders closed $1.05 lower at $135.02. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers traded steady to $3.00 higher while heifers traded steady to $3.00 lower. Steer calves were called steady while heifer calves weren't accurately tested. The sale was large offering upwards of 10,700 head and it was evident with the vast supply that buyers were more interested in steers over heifers. Temperatures are starting to warm up with most of the week projected to be in the 90s. The CME feeder cattle index 6/5/2020: up $1.16, $129.07.
LEAN HOGS:
As slaughter continues to build in the lean hog sector, the board had the opportunity to rally and the market ran with the chance. Although the market is trading for significantly lower levels that the 40-day moving average ($55.68) and the 100-day moving average ($58.20), there is an underlying sense of encouragement building in the market. June lean hogs closed $1.12 higher at $48.57, July lean hogs closed $0.05 higher at $53.97 and August lean hogs closed $0.45 higher at $57.80. Pork cutouts total 479.84 loads with 437.14 loads of pork cuts and 42.71 loads of trim. Pork cutout values: down $1.90, $70.88. Monday's slaughter is estimated at 445,000 head, 37,000 head more than a week ago and 25,000 head less than a year ago. The CME lean hog index 6/4/2020: down $0.03, $53.35.
TUESDAY'S CASH HOG CALL: Lower. Even though slaughter is impressive, and the market saw an uptick on the board, readily available hog supply is still too abundant to make packers compete for their hogs.
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