GENERAL COMMENTS:
Monday's pressure on the corn contracts has come as a beaming hope of joy for the feeder cattle contracts. Both the live and feeder cattle contracts are rallying into Monday's afternoon trade, but the feeder cattle contracts are making the most of the day's opportunity and are trading upward of $3.00 higher. July corn is down 19 1/4 cents per bushel and July soybean meal is down $1.40. The Dow Jones Industrial Average is up 264.80 points and NASDAQ is down 177.84 points.
LIVE CATTLE
The live cattle contracts aren't jumping into Monday's market as boldly as the feeder cattle contracts are. but still, higher trade is higher trade! June live cattle are up $2.00 at $118.02, August live cattle are up $0.95 at $119.80 and October live cattle are up $0.62 at $124.07. Following last week's cash cattle market, where prices traded anywhere from $1.00 to $2.00 lower, feedlots are praying that this week is better. With rewarding boxed beef prices and consumer demand that seems to be relentless, packers should be willing to dive into the cash cattle market, but feedlots know that, unfortunately with packers' forward boughten supplies, their eagerness will still be minute. This week's showlists are somewhat higher in Texas, fully higher in Kansas but lighter in Nebraska and Colorado.
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 are higher: choice up $1.64 ($307.52) and select up $3.28 ($293.55) with a movement of 33 loads (14.63 loads of choice, 5.59 loads of select, 4.74 loads of trim and 7.70 loads of ground beef).
FEEDER CATTLE
It's not a bird, it's not a plane, and no it's not superman -- the corn market is just trading lower, which has given the feeder cattle contracts the opportunity to trade sharply higher. May feeders are up $3.02 at $134.75, August feeders are up $3.57 at $147.85 and September feeders are up $3.15 at $149.20. The feeder cattle contracts have suffered a long, sharp decline thanks to the onset of wildly high corn prices and so, if the market extends any opportunity to climb out of the recently dug pit of sorry cattle prices, the market is jumping with joy. Looking at the countryside this week, the market doesn't expect to see a large number of calves and feeder cattle trade as most of the yearlings have already been worked through and there are a couple of weeks still to pass before producers begin to test the this year's feeder cattle market.
LEAN HOGS
The lean hog complex isn't breaking doors down to run bullishly into this week's trade like last week's market did. Instead, its seeming as if traders are curious as to how much the market's fundamentals are going to support these higher prices and want to be certain that the market will indeed continue to support these levels before scaling the market even higher. June lean hogs are down $0.82 at $112.02, July lean hogs are down $0.72 at $112.82 and August lean hogs are down $0.47 at $108.55. We know better than to put the cart before the horse, or in this case, maybe we should say to put the report in front of the hogs, but the morning's pork cutout is extremely light. Seeing how the afternoon report prints will be vital in trying to understand what the rest of the week's trajectory looks like.
The projected lean hog index for May 7 is up $0.88 at $110.10, and the actual index for May 6 is up $0.67 at $109.22. Hog prices are lower on the National Direct Morning Hog Report, down $0.51 with a weighted average of $109.30, ranging from $105.77 to $125.00 on 3,495 head and a five-day rolling average of $111.62. Pork cutouts total 98.59 loads with 83.97 loads of pork cuts and 14.62 loads of trim. Pork cutout values: up $1.98, $115.77.
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