GENERAL COMMENTS:
The sharp retreat in corn futures is a dream come true for feeder cattle contracts as it doesn't seem like the cash cattle market is going to gain any sizeable momentum any time soon. Lean hog futures continue to rally as consumer demand pushes prices higher and higher. If Tuesday's pork cutout value can close higher, the market could stand a chance at continuing the rally into Wednesday. July corn is down 29 3/4 cents per bushel and July soybean meal is down $13.20. The Dow Jones Industrial Average is up 51.86 points and NASDAQ is up 4.74 points.
LIVE CATTLE:
Even though boxed beef prices are higher and the corn market is trending sharply lower, live cattle futures are only rallying modestly as unanswered questions surround the cash cattle market. How in the world can cash cattle only be trading at $119 live and $190 to $191 dressed as both choice and select cuts continue to run well above $3.00 per pound? Thankfully last week's kill of 669,000 head tells us packers can indeed process more cattle. The market needs to see those type of slaughter speeds for cash cattle not to become backed up. Some light scattered trade has been reported at $120 which, compared to last week's weighted averages, is $1 higher in the South and steady in the North. Other than the light development at $120, the countryside sits quietly.
As the afternoon wears on, it wouldn't be surprising to see packers grow more interested. Asking prices in the South have been posted at $120-plus and the North has yet to share their prices. June live cattle are up $0.27 at $117.02, August live cattle are up $0.20 at $120.30 and October live cattle are up $0.35 at $124.62.
Boxed beef prices are higher: choice up $1.47 ($329.30) and select up $1.67 ($305.06) with a movement of 47 loads (21.33 loads of choice, 9.42 loads of select, 13.75 loads of trim and 2.13 loads of ground beef).
FEEDER CATTLE:
Sharp losses in corn futures come as a pleasant surprise for the feeder cattle contracts. As the nearby corn contracts plummet $0.22 to $0.35 lower, feeder cattle contracts are "making hay while the sun shines!" August feeders are up $1.80 at $155.92, September feeders are up $1.82 at $157.22 and October feeders are up $1.75 at $158.07. The feeder cattle complex would be in absolute heaven if the cash cattle market would show some encouraging signs as well. But, in the meantime the market can joyfully rally as the pressure of high input costs has been more than burdensome since the dawning of the new year.
LEAN HOGS:
With Monday's impressive pork cutout close, lean hog futures are rallying moderately in the nearby contracts, but the deferred market isn't having the same run of luck. With the ongoing problem of PRRS in parts of the U.S., and not knowing just how long demand will continue to flourish and how much supply will be available late next fall and into winter, the market has a lot to balance. June lean hogs are up $1.55 at $114.90, July lean hogs are up $2.07 at $117.40 and August lean hogs are up $2.02 at $113.57. If the day's closing reports can shine with continued consumer demand, the market's ability to keep trading higher remains strong. The upward swing in pork cutout values has packers wanting to process more hogs as they have sizeable profits to secure.
The projected CME Lean Hog Index for 5/24/2021 is up $0.40 at $112.20 and the actual index for 5/21/2021 is up $0.37 at $111.80. Hog prices are higher on the National Direct Morning Hog Report, up $3.25 with a weighted average of $105.80, ranging from $101.17 to $115.00 on 5,459 head. Pork cutouts total 205.54 loads with 186.18 loads of pork cuts and 19.36 loads of trim. Pork cutout values: up $3.82, $126.03.
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