Tuesday Midday Livestock Market Update - Hogs Lean In as Nearby Contracts Trade Higher

GENERAL COMMENTS:

The live cattle and feeder cattle markets are facing headwinds as Tuesday's afternoon rolls around, but the nearby lean hog contracts are moving higher while the opportunity lasts. Monday was influential in helping the contracts trade higher come Tuesday, as both pork cuts and cash hog prices closed higher. If the market can see that type of support through Tuesday's close, then the hog complex has the potential of trading higher yet again on Wednesday. July corn is down 8 cents per bushel and July soybean meal is down $5.00. The Dow Jones Industrial Average is up 245.25 points.

LIVE CATTLE:

The live cattle market has seen minor support help keep the spot June contract above steady prices, but the rest of the live cattle complex is trading lower. June live cattle are up $0.05 at $133.22, August live cattle are down $0.25 at $133.65 and October live cattle are down $0.37 at $139.45. Not helping the futures market's morale is that cash cattle are starting to trade, and lower tones are seeming to be the theme of the week. A very light movement of cattle has sold in the South for $138, which is $2.00 less than last week's business. The North has seen only a handful of cattle traded thus far at $227 to a Regional that bought them for the week of June 6, and bids of $225 are being offered as well. With packers having a plethora of cattle committed for this time and showlists growing it makes sense that prices are being pressured.

Boxed beef prices are higher: choice up $0.73 ($261.04) and select up $3.41 ($249.08) with a movement of 72 loads (29.12 loads of choice, 18.67 loads of select, 6.79 loads of trim and 17.53 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is so thinly traded that any essence of pressure can keep the market from trading higher. Corn prices are lower heading into Tuesday's afternoon, but with cash cattle trade beginning to develop at $2.00 weaker than last week's business, the feeder cattle contracts are teetering on whether they should trade higher thanks to weaker corn or follow in line with the live cattle market. Currently, the nearby contracts of August 2022 through October 2022 are trading higher while the rest of the market trades $0.12 to $0.62 lower. August feeder cattle are up $0.37 at $167.72, September feeder cattle are up $0.20 at $170.25 and October feeder cattle are up $0.02 at $172.45.

LEAN HOGS:

The lean hog complex is split as its nearby contracts trade higher while the deferred months traipse lower. The momentum that spurred Monday's trade higher has found it's way into Tuesday's market, as cash hog prices and pork cutout values were supported in Monday's close. The deferred months aren't able to rally as the industry knows that supplies are expected to build, and demand remains questionable. June lean hogs are up $0.82 at $104.65, July lean hogs are up $2.27 at $107.10 and August lean hogs are up $2.22 at $107.02.

The projected lean hog index for May 16 is down $0.17 at $99.90, and the actual index for May 13 is down $0.42 at $100.07. Hog prices are higher on the Daily Direct Morning Hog Report, up $3.32 with a weighted average of $104.63, ranging from $101.00 to $112.00 on 4,910 head and a five-day rolling average of $104.59. Pork cutouts total 204.94 loads with 196.56 loads of pork cuts and 8.38 loads of trim. Pork cutout values: up $2.28, $103.83.