GENERAL COMMENTS:
It was a great day for the cattle contracts as a surprising break in the corn market's rally allowed for the cattle contracts to close higher. Meanwhile, the lean hog contracts neglected to attract traders and closed the day mixed, but with slaughter speeds continuing to run at respectable levels, traders most likely were quiet through Monday's trade to see if the market's fundamentals were going to shine through before they support the market any further. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.48 with a weighted average of $112.22 on 4,695 head. July corn is down 20 1/2 cents per bushel and July soybean meal is up $0.50. The Dow Jones Industrial Average is down 34.94 points and NASDAQ is down 350.38 points.
LIVE CATTLE:
The live cattle contracts weren't as aggressive throughout Monday's trade as the feeder cattle contracts were, but the complex did close fully higher. June live cattle closed $2.20 higher at $118.22, August live cattle closed $1.50 higher at $120.35 and October live cattle closed $1.10 higher at $124.50. Thankfully, Monday's slaughter is estimated at a snappy 119,000 head, which is far better than the 114,000 head that the market saw last week. In order to keep the market current and to get enough product into the hands of consumers, the market needs to see daily processing speeds at or near 120,000 head each and every day. The cash cattle market was at an utter standstill without any business developing. Asking prices have yet to be released but should be known by midmorning Tuesday. New showlists appear to be mixed, higher in Texas, somewhat lower in Kansas, and lower in Nebraska and Colorado. Monday's slaughter is estimated at 119,000 head, 5,000 head more than a week ago.
Last week's negotiated cash cattle trade totaled 83,883 head. Of that 64% (54,064 head) were bought with delivery in the next two upcoming weeks, while the remaining 36% (29,819 head) are scheduled for delivery in the following 15 to 30 days.
Boxed beef prices closed higher: choice up $3.23 ($309.11) and select up $3.49 ($293.76) with a movement of 71 loads (35.02 loads of choice, 13.83 loads of select, 13.30 loads of trim and 9.15 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Packers are going to be hard to deal with again this week as they have a plethora of cattle already committed for this time in their forward bought purchases. But if processing speeds continue to run at a vigorous pace, they may need to work the cash cattle market a little bit more aggressively than they have in weeks past.
FEEDER CATTLE:
The corn complex had a strenuous day and saw losses anywhere from $0.17 to $0.27 lower, which allowed for the feeder cattle contracts to have a gain-busters type of day. May feeders closed $3.72 higher at $135.45, August feeders closed $4.42 higher at $148.70 and September feeders closed $4.02 higher at $150.07. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week at midsession, feeder steers sold steady and feeder heifers sold steady to $2.00 higher with the most advancements on the heavier weights. Steer calves traded $2.00 to $4.00 higher and heifer calves sold steady. Demand was moderate to good and the countryside has been recently blessed with moisture, which is helping grass come along. The CME Feeder Cattle Index for May 7: down $0.68, $130.15.
LEAN HOGS:
The lean hog contracts struggled throughout the day and the nearby contracts never were able to summon enough support to close higher but the deferred contracts did round out the day mildly higher. June lean hogs closed $0.75 lower at $112.10, July lean hogs closed $0.85 lower at $112.70 and August lean hogs closed $0.92 lower at $108.10. Pork cutout values closed slightly lower, but the day's slaughter ran aggressively again, which is a continued positive sign for pork demand. Pork cutouts total 259.95 loads with 238.36 loads of pork cuts and 21.59 loads of trim. Pork cutout values: down $0.63, $113.16. Monday's slaughter is estimated at 483,000 head, 5,000 head more than a week ago. The CME lean hog index 5/6/2021: up $0.67, $109.22.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Sure, Monday's cash hog market closed slightly weaker, but with supplies as thin as they are for market-ready hogs, packers are having to support the market regardless of its prices level.
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