GENERAL COMMENTS:
From Monday's market, the livestock contracts have flipped positions as the cattle complex has found support and lean hog are trending lower. The hog market's pause on its ascend comes as fundamental support lags. Traders need to continue to see strong cash interest from packers and a supporting pork cutout value in order to keep prices trending higher. July corn is down 22 3/4 cents per bushel and July soybean meal is up $2.10. The Dow Jones Industrial Average is down 263.09 points.
LIVE CATTLE:
The live cattle market is keeping with its elevated tone and modestly pushing the contracts higher except for the spot August contract, which is seeing minor pushback. The live cattle market is somewhat holding its breath as the market's technicals have strengthened somewhat with boxed beef prices trending higher and traders interested in supporting the market. However, the fate of the cash cattle market isn't going to change in the near future. As supplies begin to overwhelm the market, packers are able to sit back and let shows build to the point where feedlots are begging for any bid, let alone a decent one. Nevertheless, the cash cattle market hasn't seen any interest thus far in the day, and it's likely that packers show the market very little interest this week as they sit on large numbers of cattle committed in their deferred delivery. Asking prices in the South are noted at $140 and the North has yet to disclose their asking prices.
Boxed beef prices are higher: choice up $0.64 ($264.92) and select up $1.91 ($246.14) and with a movement of 77 loads (41.61 loads of choice, 19.19 loads of select, 3.56 loads of trim and 12.57 loads of ground beef).
FEEDER CATTLE:
As the corn market dives $0.19 to $0.22 lower in its nearby contracts, the feeder cattle market wastes no time springing to a $3.00 rally. August feeders are up $3.05 at $168.67, September feeders are up $3.20 at $171.50 and October feeders are up $3.02 at $173.77. Largely, the feeder cattle market's strength comes from a two-sided combo as corn prices take a turn for lower prices and, given the vast downfall that feeders had last week, the market can rally its position without any nearby fears of resistance pressure. The market will closely watch corn prices heading into the afternoon -- any support the live cattle market can lend will only strengthen feeders.
LEAN HOGS:
Last week, the lean hog complex was able to rally as the market's technicals and fundamentals worked together to advance the market higher. But with Monday's mixed close (a higher futures market and stronger slaughter pace, but a weak cash market and weaker pork cutout value), Tuesday's market is left to sort out the find details. June lean hogs are down $1.45 at $108.92, July lean hogs are down $1.60 at $109.25 and August lean hogs are down $1.67 at $108.55. In order for traders to feel comfortable in pushing the market any higher, they'll need to see strong cash interest and demand from consumers.
The projected lean hog index for May 23 is up $0.95 at $103.03, and the actual index for May 20 is up $0.91 at $102.08. Hog prices on the Daily Direct Morning Hog Report average $111.39, ranging from $100.00 to $113.50 on 1,990 head and a five-day rolling average of $110.27. Pork cutouts total 164.12 loads with 142.24 loads of pork cuts and 21.88 loads of trim. Pork cutout values: up $0.81, $107.86.
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