GENERAL COMMENTS:
Both the live cattle and lean hog contracts closed the day mostly higher, but the feeder cattle complex couldn't stomach another day of higher corn prices. With both the May and June corn contracts closing limit higher, calf buyers have to look at their cost of gains and really analyze their breakeven point. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.48 with a weighted average of $107.71 on 4,332 head. July corn is up 25 cents per bushel and July soybean meal is up $5.70. The Dow Jones Industrial Average is down 61.92 points and NASDAQ is up 121.97 points.
LIVE CATTLE:
Given the dynamic nature of the cattle market with aggressive slaughter speeds and higher boxed beef prices but lower cash cattle trade, the futures market attitude weighs heavily on the complex. It was surprising to see the futures market higher throughout Monday's trade, but some of the market's optimism could be that traders found Friday's COF report to be bullish. June live cattle closed $0.55 higher at $116.27, August live cattle closed $1.10 higher at $117.95 and October live cattle closed $0.72 higher at $122.77. Monday's slaughter is estimated at 117,000 head, 2,000 head less than a week ago and incomparable to year ago levels. New showlists appear to be mixed, higher in Kansas, Nebraska/Colorado, but lower in Texas.
Last week's negotiated cash cattle trade totaled only 67,738 head. Of that 52% (35,291 head) are committed for delivery in the next two upcoming weeks, while the remaining 48% (32,447 head) are scheduled for delivery in the following 15 to 30 days.
Boxed beef prices closed higher: choice up $1.43 ($285.20) and select up $2.22 ($274.35) with a movement of 87 loads (56.76 loads of choice, 12.50 loads of select, 9.34 loads of trim and 8.06 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to somewhat lower. Although it shouldn't be so, this week's cash cattle market is going to have a road ahead of it as packers have ample supplies of cattle already committed for this time.
FEEDER CATTLE:
The corn market jumped back and forth but as the afternoon traded on, the market only grew stronger and both the May and July corn contracts closed limit higher. Amid sharply higher corn prices and a lack of support from the cash cattle market, the feeder cattle contracts felt pressured to close lower once again. Both the August and September feeder cattle contracts closed higher but with the April contract set to expire later this week, traders are simply moving their positions around. May feeders closed $0.40 lower at $137.27, August feeders closed $0.40 higher at $150.30 and September feeders closed $0.22 higher at $152.27. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week at midsession, feeder steers were selling $3.00 lower, feeder heifers were selling $4.00 to $6.00 lower and steer and heifer calves were selling $6.00 to $9.00 lower. The CME Feeder Cattle Index for April 23: not available at this time.
LEAN HOGS:
The lean hog contracts fought some hesitation from the market's fundamentals as cash prices closed lower and pork cutout values dipped lower as well, but the futures market continued to support the complex through the day's close. June lean hogs closed $1.12 higher at $106.85, July lean hogs closed $1.15 higher at $105.67 and August lean hogs closed $1.15 higher at $102.30. It's encouraging to see the week's slaughter diving into the new week with an aggressive pace of 489,000 head. Amid a weaker cutout value and lower cash market, the more rigorous slaughter pace is a positive fundamental component that the market desperately needs in order to keep supplying consumers with the product they yearn for. Pork cutouts totaled 280.07 loads with 256.17 loads of pork cuts and 23.90 loads of trim. Pork cutout values: down $2.64, $109.30. Monday's slaughter is estimated at 489,000 head, 4,000 head more than a week ago and incomparable to year ago levels. The CME Lean Hog Index for April 22: up $0.52, $106.51.
TUESDAY'S CASH HOG CALL: Higher. If the market is going to try to run as close to 490,000 head as possible, packers will most likely need to scout the countryside again for cash hogs in order to fill capacity, as supplies are incredibly thin.
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