GENERAL COMMENTS:
It was a peculiar day for cattle market, and even though the boxed beef market is now trending lower, they pushed the cash cattle market to advancements of $2.00 to $4.00 higher. The lean hog market continues to trade in an uneased position as the market is summoning higher or even steady pork cutout prices and traders aren't willing to move their positions any higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $5.83 with a weighted average of $122.72 on 7,238 head. July corn is up 8 1/4 cents per bushel and July soybean meal is down $1.50. The Dow Jones Industrial Average is down 94.42 points and NASDAQ is down 101.28 points.
LIVE CATTLE:
Trying to make sense of the current live cattle market isn't one for those who like short, direct and to the point, type of answers. A logical person would think that as soon as the boxed beef market started to veer lower, the cash cattle prices would follow in the same manner -- but guess again, 2021's market isn't that simple. Yes, boxed beef priced did indeed close lower, but the board closed $1.00 to even $2.00 higher in some of the nearby contracts and cash cattle market saw a $2.00 to $4.00 rally. Calling a spade, a spade and understanding Tuesday's cash cattle market comes down to the fact that packers know they are being heavily watched by the industry and they know that the countryside has had enough. But the real test of packers' "good-faith" will come in the next five to six weeks. Packers may be willing to pay higher prices this week, especially considering that, even though boxed beef prices are trailing lower, they are still making phenomenal money, but it's not likely that they will continue to do so in the weeks to come. June live cattle closed $1.85 higher at $121.22, August live cattle closed $2.62 higher at $123.90 and October live cattle closed $1.82 higher at $128.62. There was a light trade that took place in the North at mostly $195, which is $4.00 higher than last week's weighted average, and some cattle traded in the South from $120 to $122, which is steady to $2.00 stronger. The Texas Cash Pool was able to sell 450 head at $122.00 Tuesday afternoon. The other bids that surfaced were that of $118, $120 or $191 FOB.
Tuesday's slaughter is estimated at 121,000 head, 1,000 head more than a week ago and 4,000 head more than a year ago. Monday's slaughter was revised to 116,000 head, 3,000 head less than what was originally stated.
Boxed beef prices closed lower: choice down $1.04 ($334.43) and select down $5.13 ($298.28) with a movement of 128 loads (65.22 loads of choice, 41.91 loads of select, 15.91 loads of trim and 5.22 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Packers may be willing to support the market this week, but it's not likely that it gets higher than what this week's already been able to accomplish.
FEEDER CATTLE:
The feeder cattle contracts did it again! With the corn market trending lower, the feeder cattle contracts saw Tuesday as another opportunity to trade higher, and the market did so on all fronts. The futures market closed higher and the higher trade on the board stimulated stronger prices throughout the countryside. August feeders closed $2.22 higher at $156.82, September feeders closed $1.82 higher at $158.65 and October feeders closed $1.45 higher at $160.02. If the market can hold this price point, Thursday's big run of feeder cattle at Superior's Corn Belt Classic stands a good chance of demanding higher prices, especially if the corn market continues to tromp lower. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold $4.00 to $7.00 higher with instances up to even $10.00 higher, and feeder heifers sold $4.00 to $6.00 higher. Steer calves traded $4.00 to $6.00 higher and heifer calves traded $4.00 to $8.00 lower. The CME Feeder Cattle Index for June 14: up $0.61, $140.22.
LEAN HOGS:
The lean hog market had a mixed day as the market continues to see stellar demand in the cash market with supplies extremely thin, but the market didn't see the support it needed through the afternoon pork cutout close. July lean hogs closed $0.27 higher at $118.50, August lean hogs closed $0.10 lower at $114.70 and October lean hogs closed $0.77 lower at $94.02. The market sits in a fickle position as pork cutout prices are veering lower, but given the price point of the meat cuts, packers are still working the cash market extensively as there is money to be made. This type of choppy trade isn't comforting for the market's trajectory, and it cautions everyone, as a true understanding of the market's path is hard to determine. Pork cutouts totaled 357.06 loads with 321.88 loads of pork cuts and 35.19 loads of trim. Pork cutout values: down $6.17, $122.51. Tuesday's slaughter is estimated at 484,000 head, 1,000 head less than a week ago and 24,000 head more than a year ago. Monday's slaughter was revised to 474,000 head, 5,000 head less than what was originally stated. The CME Lean Hog Index for June 11: up $1.05, $121.89.
WEDNESDAY'S CASH HOG CALL: Steady. Packers will need to continue to support the cash hog market in order to keep processing speeds elevated, but how much they will need to support it is tough to pinpoint. Supplies are thin, but packers are losing some of their margins with the deterioration of the weaker pork cutout prices.
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