GENERAL COMMENTS:
It was a tough way to start out the week for the livestock complex as all of the contracts closed sharply lower. The big question laying ahead for the rest of the week to answer is: How will the cash cattle market perform through this? Showlists are still favorable to feedlots, but the board doesn't look like it's got much of a backbone for now anyways. Hog prices closed $0.64 higher on the Daily Direct Afternoon Hog Report, averaging $99.77 on 4,180 head. July corn is up 9 cents per bushel and July soybean meal is down $6.50. The Dow Jones Industrial Average is up 238.06 points.
LIVE CATTLE:
Even after last week's aggressive cash cattle market, packers showed mild interest in Monday's market, which could mean that they're still in need of cattle. Time is of the essence and feedlots know that regardless of what the board does, if they wish to capitalize on the market at hand, they'll need to act swiftly as calf-fed fats are nearing the market. Showlists this week are lower in Kansas, Nebraska and Colorado but somewhat higher in Texas. The market saw some light trade develop but it certainly wasn't enough to say that any sort of trend was established. Packers are expected to be more aggressive in Tuesday's market and will likely try to use the board's lower tone to get cattle bought cheaper. June live cattle closed $3.00 lower at $135.42, August live cattle closed $3.05 lower at $137.32 and October live cattle closed $2.07 lower at $144.07.
Monday's slaughter is estimated at 125,000 head, 13,000 head more than a week ago and 7,000 head more than year ago.
Last week's negotiated cash cattle trade totals 110,597 head. Of that 71% (78,267 head) were committed for the nearby delivery, while the remaining 29% (32,330 head) were committed for the deferred delivery.
Boxed beef prices closed mixed: choice down $1.31 ($266.60) and select up $1.75 ($256.62) with a movement of 67 loads (24.85 loads of choice, 19.05 loads of select, 5.03 loads of trim and 17.89 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Last week's market was aggressive in terms of price and volume, but with Mother's Day, Father's Day and Memorial Day all in the near future, packers want to get cattle bought and meat shipped out for sale.
FEEDER CATTLE:
The corn market helped turn the feeder cattle contracts upside down, but largely Monday's market was a day of mass selling, which drove feeders lower. May feeders closed $2.57 lower at $161.30, August feeders closed $2.40 lower at $174.50 and September feeders closed $1.97 lower at $177.60. After an exhilarating week last week, the market will have to determine which fate is in its nearby future -- keeping with last week's momentum or falling lower as Monday pressured. Thankfully, the live cattle complex is still expecting to see strong packer interest in the cash market which could help keep the fundamental side of the market and keep the market's morale from completing melting away. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, a run of 7,000 head, feeder steers and heifers traded unevenly steady, but steer calves traded $10.00 to $12.00 higher and heifer calves sold $2.00 to $5.00 stronger. The CME Feeder Cattle Index for April 22: up $1.31, $156.52.
LEAN HOGS:
The lean hog market plummeted lower throughout Monday's trade as traders deemed the marketplace a dangerous place to be. June lean hogs closed $4.75 lower at $114.02, July lean hogs closed $4.15 lower at $115.87 and August lean hogs closed $3.37 lower at $114.70. The lean hog market didn't need the added pressure as the market was already struggling thanks to hit and miss consumer interest. Nevertheless, this downward technical pressure is likely to keep the market depressed for the next couple days. Pork cutouts total 293.79 loads with 257.50 loads of pork cuts and 36.30 loads of trim. Pork cutout values: down $5.49, $105.79. The belly took the biggest blow as it dropped $24.18 to $169.90, the other cuts fell mildly but the rib did gain $6.25 to $198.56. Monday's slaughter is estimated at 465,000 head, 112,000 head more than a week ago and 15,000 head less than a year ago. The CME Lean Hog Index for April 21: up $0.42, $101.67.
TUESDAY'S CASH HOG CALL: Steady to somewhat lower. Packers are still going to want to see some signal from consumers that they do indeed want more pork, but at the same time, the board's downward pressure could give them a chance to buy hogs cheaper.
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