GENERAL COMMENTS:
The feeder cattle contracts had to keep a close eye on the corn market's behavior Monday, but as the day neared its end, traders grew cold of the corn market, which ultimately allowed for feeders to close higher. Meanwhile, both the live cattle and lean hog contracts closed lower as neither of the contracts could attract substantial support. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.95 with a weighted average of $123.57 on 7,897 head. July corn is up 4 cents per bushel and July soybean meal is down $0.30. The Dow Jones Industrial Average is up 586.89 points and NASDAQ is up 111.10 points.
LIVE CATTLE:
The live cattle contracts weren't able to pull off a higher close like the feeder cattle contracts, but they are hoping to see at least a steady market in this week's cash cattle trade. Last week's pump in cash cattle prices gave the market some victory to savor as the market had been trading stagnantly steady for the previous eight weeks in a row. Pinpointing how packers will treat the cash cattle market in the weeks to come is difficult as they are making plenty on boxed beef prices to continue to support at least steady prices, but as the boxed beef market scales lower, they could be antsy to drop their cash bids. New showlists appear to be somewhat higher in Kansas, Texas, Nebraska and Colorado. There was a small sampling of trade that developed in Iowa, but nothing sizeable enough to consider that the market was tested. Trade could begin to develop Tuesday afternoon or sometime Wednesday. Monday's slaughter is estimated at 118,000 head, 2,000 head more than a week ago and 3,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 79,496 head with 78% (62,309 head) being committed for the nearby delivery, while the remaining 22% (17,187 head) were committed for the deferred delivery in the following 15 to 30 days.
Boxed beef prices closed lower: choice down $2.08 ($321.20) and select down $2.15 ($281.46) with a movement of 90 loads (49.72 loads of choice, 17.60 loads of select, 12.06 loads of trim and 10.56 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. With the Senate ag committee meeting Wednesday to address the cattle market, I don't think that packers will want to draw any attention their way with a weaker cash cattle market.
FEEDER CATTLE:
The corn market fought tooth and nail to keep both the July and September contracts higher, even if the rest of the market wanted to close lower. But as the day came to a close, the September contract slipped lower and left only the July contract to close a measly $0.04 higher. The weakness in the corn market gave the feeder cattle contracts an opportunity to muster, and before the day's end, the market closed modestly higher with the deferred contracts finding most of the market's support. August feeders closed $0.07 higher at $155.10, September feeders closed $0.15 higher at $157.37 and October feeders closed $0.27 higher at $159.32. The corn market's regression only came as fuel to the market's momentum throughout the countryside, as buyers are eager to buy after last week's exciting trade. At the midsession at Joplin Regional Stockyards in Carthage, Missouri, compared to a week ago, feeder steers were trading $3.00 to $5.00 higher and feeder heifers were trading $3.00 to $6.00 higher with the biggest advancements seen on the heavier weights. The CME Feeder Cattle Index for June 18: up $1.13, $144.58.
LEAN HOGS:
The lean hog market has posted a gradual rally since the beginning of the year, but once the market decided to trend lower, its pace has shifted from gradual to aggressive. July lean hogs closed $1.62 lower at $107.05, August lean hogs closed $3.00 lower at $103.67 and October lean hogs closed $2.65 lower at $85.45. The market did see supportive signs in both the afternoon pork cutout values and in the cash market, but with how aggressive the market's technical downtrend is, there wasn't enough of a bump in either prices to make the market think that trading steady or higher are a viable option. Pork cutouts totaled 335.41 loads with 298.91 loads of pork cuts and 36.50 loads of trim. Pork cutout values: up $0.11, $120.76. Monday's slaughter is estimated at 468,000 head, 6,000 head less than a week ago and 23,000 head more than a year ago. The CME Lean Hog Index for June 17: down $1.25, $120.43.
TUESDAY'S CASH HOG CALL: Steady. Monday's afternoon close of seeing the cash market up $0.95 is pretty aggressive for early in the week. Supplies are tight throughout the market, so packers will need to continue to purse the cash hog market for adequate supplies, but they will also want to ensure that the market's demand is yearning for the meat before they sacrifice any margin of their own.
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