GENERAL COMMENTS:
Cattle futures didn't have much luck with Monday's trade on a technical front, but the lean hog contracts didn't bat an eye about trading higher after being mostly lower last week. Hog prices closed lower on the National Direct Afternoon Hog Report, down $4.36 with a weighted average of $112.53 on 5,916 head. December corn is up 28 cents per bushel and December soybean meal is up $4.40. The Dow Jones Industrial Average is down 150.57 points and NASDAQ is up 140.12 points.
LIVE CATTLE:
Live cattle futures wanted to trade mildly higher, and they did so in the deferred contracts, but the nearby contracts feared the market's uncertainty and closed modestly lower. August live cattle closed $1.20 lower at $121.60, October live cattle closed $0.87 lower at $127.52 and December live cattle closed $0.30 lower at $131.92. The cash cattle market didn't see any significant trade develop and, following last week's lousy movement, the market sat waiting for anything to happen. Understanding that plants will be dark on this upcoming Saturday, and could have limited production this Friday and even next Monday, really puts the cash cattle market on edge as the market desperately needs to keep chain speeds elevated and needs to keep showlists current. Monday's slaughter is estimated at 118,000 head -- steady with a week ago and 1,000 head more than a year ago.
Last week's negotiated cash cattle traded totaled 48,965 head. Of that 67% (32,832 head) are committed for nearby delivery while the remaining 33% (16,133 head) are committed for delivery in the following 15 to 30 days.
Boxed beef prices closed lower: choice down $7.13 ($297.43) and select down $2.22 ($273.96) with a movement of 119 loads (84.78 loads of choice, 18.04 loads of select, 7.93 loads of trim and 8.26 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Higher. Feedlots could have tipped their hats to packers last week and let cattle go at cheaper prices, but instead they opted to try to get more money and it's likely they try again this week even though time isn't in their favor. It wouldn't be surprising to see packers start to show interest in feedlot showlists as early as Tuesday.
FEEDER CATTLE:
Corn futures rallied into Monday afternoon and closed substantially higher, 28 to 39 cents higher in the nearby contracts. Given the rally and the recently found demand that buyers have been asserting at sales across the country, the feeder cattle contracts most likely could have traded higher if the corn market would have been modest in its rally. But a rally that flirted with closing limit higher was a bit much for the feeder cattle contracts to stomach Monday. August feeders closed $3.20 lower at $156.35, September feeders closed $2.17 lower at $159.07 and October feeders closed $1.65 lower at $161.05. At the midsession point at Oklahoma's National Stockyards in Oklahoma City, Oklahoma, compared to last week feeder steers and heifers sold $2.00 to $4.00 higher. Demand was good for feeder cattle despite the cattle futures being lower and corn prices again scaling higher. Steer calves were lightly tested but a few sold for $4.00 higher and heifer calves traded $2.00 to $8.00 higher. The CME Feeder Cattle Index 6/25/2021: down $0.11, $146.18.
LEAN HOGS:
The lean hog market found a bottom (for now) at $100.00 in the spot July contract and at $98.75 in the nearby August contract, and rallied robustly through Monday's trade. July lean hogs closed $3.00 higher at $104.95, August lean hogs closed $3.00 higher at $102.77 and October lean hogs closed $3.00 higher at $87.40. The cash hog market saw weaker interest, which is likely stemming from slower processing speeds which are going to be a mandated reality for some plants as early as this week. Food Safety News reported, "The plants will be required to a maximum line speed of 1,106 head per hour starting June 30, as opposed to the current 1,225 to 1,450 head they are managing."
Pork cutouts totaled 299.59 loads with 256.22 loads of pork cuts and 43.37 loads of trim. Pork cutout values: up $5.09, $115.13. Monday's slaughter is estimated at 454,000 head -- 14,000 head less than a week ago and 12,000 head less than a year ago. Friday's slaughter was revised to 442,000 head -- 9,000 head less than what was originally stated. The CME Lean Hog Index 6/24/2021: down $2.19, $115.43.
TUESDAY'S CASH HOG CALL: Steady. Seeing that Monday's market endured a significant drop, it wouldn't be unlikely to see Tuesday's market steady, especially given the fact that pork cutouts closed more than $5.00 higher.
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