GENERAL COMMENTS:
Cattle contracts had a tough Tuesday as support seemed to be nearly impossible to find. Gauging how fast and how far the market will drop on the live cattle spectrum seems to be everyone's concern heading into June and nearing the dog days of summer. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.74 with a weighted average of $34.60 on 6,350 head sold. July corn is up 1 cent per bushel and July soybean meal is up $0.60. The Dow Jones Industrial Average is up 267.63 points and NASDAQ is up 56.33 points.
LIVE CATTLE:
Live cattle contracts closed sharply lower in nearby contracts and moderately lower in deferred. As the summer heat reminds us that summer is here, cattlemen know that, with the turning of the seasons, cash cattle prices are bound to weaken. June live cattle closed $3.00 lower at $95.30, August live cattle closed $2.77 lower at $96.20 and October live cattle closed $1.95 lower at $99.42. There was another round of light trade in the North were dressed cattle trade for $176 to $178, steady to $4.00 lower than the majority of Monday's trade. Tuesday's slaughter is estimated at 113,000 head, 7,000 head more than a week ago and 5,000 head less than a year ago.
Boxed beef prices closed lower: choice down $22.42 ($318.73) and select down $26.25 ($290.58) with a movement of 127 loads (66.48 loads of choice, 30.02 loads of select, 22.73 loads of trim and 8.21 loads of ground beef). Tuesday's close for boxed beef prices rings new record losses in a day's time for both choice and select products.
WEDNESDAY'S CASH CATTLE CALL: Lower. It's far from a bullish sign that, as of Tuesday, some Northern cattle have already traded $4.00 lower compared to Monday's trade. Seeing that the boxed beef values are tumbling lower and that the board is willing to take $2.00 to $3.00 losses, cash cattle trade will most likely be lower throughout the rest of week.
FEEDER CATTLE:
Feeder cattle contracts closed over $2.00 lower in nearby contracts and almost $2.00 lower in deferred contracts. August feeders closed $2.70 lower at $133.42, September feeders closed $2.30 lower at $134.90 and October feeders closed $2.10 lower at $135.67. The feeder cattle market is vulnerable to what the live cattle contracts and cash cattle market do in the near future. Tuesday's close is still above the 40-day moving average ($123.21) and above the 100-day moving average ($128.82) and a year ago the feeder cattle market closed at $133.50. At Ozarks Regional Stockyards, in West Plains, Missouri, compared to last week, steer and heifer calves trade steady to $3.00 higher with yearlings not well tested. Demand was good and continued to improve throughout the day on a heavy supply (4,500 head). The CME feeder cattle index 6/1/2020: down $0.71, $128.25.
LEAN HOGS:
The lean hog complex was the only livestock market able to close somewhat higher Tuesday afternoon. Nearby contracts struggled to rally with deferred contracts as the backlog of supply continues to pressure the futures market and cutout values. June lean hogs are down $2.20 at $52.40, July lean hog are down $0.27 at $54.87 and August lean hogs closed $0.45 higher at $55.50. Pork cutouts totaled a whopping 571.70 loads with 527.34 loads of pork cuts and 44.36 loads of trim. Pork cutout values are down $6.67, $74.37. Tuesday's slaughter is estimated at 417,000 head, 12,000 head more than a week ago and 61,000 head less than a year ago. The CME lean hog index 5/29/2020: down $1.29, $59.96.
WEDNESDAY'S CASH HOG CALL: Lower. Thankfully packers are continuing to process hogs at incredible speeds, but regardless of how much slaughter increases from the previous week, the backlog that has accumulated over the last two months is still going to take weeks to get through before the market is current again.
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