GENERAL COMMENTS:
It was a second-rate day for the livestock complex as the futures market didn't support the idea of higher trade and the cash cattle market saw cattle sell at steady money again this week. Meanwhile, the cash hog market continues to see aggressive interest from packers as limited availability of market-ready hogs keeps them active in the cash market. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.27 with a weighted average of $109.10 on 11,050 head. July corn is up 3 1/4 cents per bushel and July soybean meal is down $1.30. The Dow Jones Industrial Average is down 84.96 points.
LIVE CATTLE:
The futures market was lousy all throughout Tuesday's trade. Packers swooped in, buying drabs of cattle here and there, while the market pointed to lower tones, making steady prices and deferred delivery dates again the theme of the cash market. June live cattle closed $1.15 lower at $132.40, August live cattle closed $1.27 lower at $134.10 and October live cattle closed $1.25 lower at $141.37. Roughly 18,000 head of cattle sold throughout the day with Southern live cattle selling for $140 (fully steady) and cattle in eastern Nebraska selling for $230 ($0.50 lower than a week ago). Once again packers were able to buy a large majority of the cattle in the North with time for the week of May 30. The silent saving grace of the market continues to be processing speeds, which are helping keep feedlots current and will hopefully help to maintain currentness even when supplies get heavy later this month.
Tuesday's slaughter is estimated at 125,000 head -- 1,000 head more than week ago and 6,000 head more than year ago.
Boxed beef prices closed mixed: choice up $3.85 ($258.29) and select down $1.93 ($243.13) with a movement of 131 loads (63.28 loads of choice, 31.16 loads of select, 19.83 loads of trim and 16.60 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Given the board is seeing pushback and cash cattle have already begun to trade, it's likely prices hold steady with the week's trend.
FEEDER CATTLE:
It was a tough day of sellouts for the feeder cattle complex as early in the day the market couldn't summon any interest to save its life. Then, by the afternoon, the corn market grew stronger, which amplified the feeder market's nervousness and sent contracts plummeting. May feeders closed $0.87 lower at $158.92, August feeders closed $2.37 lower at $171.85 and September feeders closed $2.27 lower at $174.95. It's likely that with the live cattle market not seeing much support, this downward tone sweeps into Wednesday's market unless the corn market turn abruptly lower. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week on a run of 6,532 head feeder steers over 800 pounds sold steady to $3.00 higher and steers under 800 pounds traded $1.00 to $4.00 lower. Feeder heifers traded unevenly steady and steer and heifer calves traded $4.00 to $8.00 higher after last week's rain helped improve local cattlemen's morale and grass pastures. The CME Feeder Cattle Index 5/9/2022: up $0.70, $156.21.
LEAN HOGS:
Once again bellies saw a sharp sell-off (falling $15.53 Tuesday) which pulled the pork cutout value lower Tuesday afternoon. The spot June contract was able to close slightly higher, but overall, the tone throughout the complex isn't supportive as pork cutouts and the board both closed lower. But what's been incredibly interesting to watch has been the lean hog market. Despite pork cutout values being under fire and being pressured to trade lower -- packers are staying active and aggressive in the cash hog market as thin supplies of market-ready hogs are keeping packers on their toes. It will be interesting to see in Thursday's WASDE report how prices are projected to perform throughout the second half of the year. June lean hogs closed $0.27 higher at $101.57, July lean hogs closed $1.22 lower at $102.97 and August lean hogs closed $1.12 lower at $103.35. Pork cutouts totaled 317.65 loads with 305.98 loads of pork cuts and 11.67 loads of trim. Pork cutout values: down $4.20, $100.19. Tuesday's slaughter is estimated at 480,000 head -- steady with a week ago and 1,000 head less than year ago. Monday's hog slaughter was revised to 461,000 head -- 7,000 head less than what was originally stated. The CME Lean Hog Index 5/6/2022: up $0.18, $101.09.
WEDNEDSAY'S CASH HOG CALL: Steady. Packers were aggressive buyers in both Monday and Tuesday cash hog markets, which could mean they won't be as aggressive in the second half of the week. But given that packers showed stronger than normal interest in Monday's market, I don't foresee their interest come Wednesday slipping to none at all as limited supplies will keep them chasing the market.
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