GENERAL COMMENTS:
All in all, it was a mostly quiet day throughout the livestock complex as the lean hog contracts didn't find enough fundamental support to close higher and the live cattle contracts continue to trade in a pressured manner. Meanwhile, as the corn market closed mixed, the feeder cattle contracts saw the market's uncertainty as an opportunity to close higher and did so with ease. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.51 with a weighted average of $110.10 on 5,910 head. July corn is up 8 3/4 cents per bushel and July soybean meal is down $3.60. The Dow Jones Industrial Average is down 54.34 points and NASDAQ is down 50.93 points.
LIVE CATTLE:
With packers only buying 68,950 head last week, the futures market didn't feel fully confident in closing higher when slaughter speeds are running meekly, and this week's cash market is bound to be pressured once again. June live cattle closed $0.05 higher at $115.35, August live cattle closed $0.40 lower at $118.42 and October live cattle closed $0.15 higher at $123.40. Monday's boxed beef prices were able to close higher, which is a positive note as here in the next week or two the market is most likely going to set a seasonal high as buying tends to lessen after the Memorial Day weekend. New showlists appear to be mixed, higher in Kansas, somewhat lower in Nebraska/Colorado, but lower in Texas. There was just a handful of trade that developed in parts of Kansas and Iowa for $119 to $120, but it certainly wasn't enough to say that the market was genuinely tested. Monday's slaughter is estimated at 115,000 head, 3,000 head more than week ago.
Last week's negotiated cash cattle movement totaled 68,950 head. Of that 74% (50,690 head) were purchased for the nearby delivery, while the remaining 26% (18,260 head) were purchased for the deferred delivery in the next 15 to 30 days.
Boxed beef prices closed higher: choice up $2.68 ($319.62) and select up $3.70 ($296.89) with a movement of 85 loads (38.03 loads of choice, 13.24 loads of select, 20.29 loads of trim and 13.42 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 lower. Packers didn't show much interest in last week's market and it's likely that they will only mildly support this week's market as well. As they continue to run slaughter speeds well below full capacity, supplies of market-ready cattle will soon grow and favor their position once again.
FEEDER CATTLE:
The feeder cattle contracts were cautious about their attitude early Monday morning, but as the day progressed and the corn market didn't soar significantly higher, the feeder cattle contracts grew more and more confident in their upward quest. May feeders closed $0.37 higher at $137.92, August feeders closed $1.60 higher at $152.75 and September feeders closed $1.55 higher at $154.22. With the May contract set to expire next week, most of the market's attention now lies on the August feeder cattle contract, which was finally able to close above the 100-day moving average. At the midsession point at the Oklahoma National Stockyards Feeder Cattle Sale in Oklahoma City, Oklahoma, where they have an offering of 8,000 head for Monday's sale, feeder steers and heifers are both trending at steady prices. While steers calves are trading $2.00 to $4.00 lower and heifer calves are trading steady. The CME Feeder Cattle Index for May 14: up $2.17, $133.90.
LEAN HOGS:
The lean hog market buzzed with anxiousness around the noon hour when the midday pork cutout value showed a lofty advancement of $10.08. But knowing too well the feeling of "putting the cart before the horse," we sat back and knew that we needed to see the day's afternoon pork cutout close before thinking that the market was headed to the moon again. Pork cutout values closed slightly higher for the day, but the afternoon's final printing of being up $0.87 is a whole different story than the midday's price of being up a whopping $10.08. The futures market continues to look for fundamental support from both the pork cutout value and the cash hog market, but if neither market shows groundbreaking advancements, the market could very easily continue in its downward trend. Pork cutouts totaled 303.53 loads with 281.89 loads of pork cuts and 21.64 loads of trim. Pork cutouts closed higher: choice up $0.87, $116.57. Monday's slaughter is estimated at 478,000 head, 5,000 head less than a week ago. The CME Lean Hog Index for May 13: down $0.01, $110.93.
TUESDAY'S CASH HOG CALL: Steady to somewhat lower. Seeing that hogs from Canada continue to work their way into the U.S., packers have more supplies to choose from, and with reducing slaughter speeds, their need to be aggressive in the cash hog market lessens.
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