GENERAL COMMENTS:
The livestock contracts had a tough technical day as traders paid the market no attention, but in terms of slaughter and consumer demand, the market held its own. The cash cattle market didn't see any trade develop, and feedlots are expected to hold the market at steady prices this week. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.11 with a weighted average of $112.20 on 3,085 head. July corn is up 15 1/2 cents per bushel and July soybean meal is down $0.80. The Dow Jones Industrial Average is up 16.08 points.
LIVE CATTLE:
The live cattle market came up short of summoning any support throughout Monday's trade, but thankfully the market did see higher boxed beef prices and an aggressive slaughter to offset the lousy technical interest. June live cattle closed $0.77 lower at $132.82, August live cattle closed $0.95 lower at $132.90 and October live cattle closed $0.60 lower at $139.10. After last week's support, it seems as though traders are waiting to see how the market's fundamentals play out this week. Given the seasonality of June, it's not likely that the market sees a robust mind-blowing rally, but it's fair to say that prices could hold steady and maybe even creep higher. Feedlots are expected to hold the cash cattle market at steady prices this week, which would come as a significant accomplishment.
Monday's slaughter is estimated at 125,000 head, 122,000 head more than a week ago and 8,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 84,397 head. Of that, 82% (68,823 head) were committed for the nearby delivery, while the remaining 18% (15,574 head) were committed for the deferred delivery.
Boxed beef prices closed higher: choice up $2.32 ($269.58) and select up $1.07 ($251.09) with a movement of 70 loads (35.11 loads of choice, 23.10 loads of select, 4.85 loads of trim and 7.32 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Given how aggressive packers are running chain speeds, feedlots know that they could use some more cattle and intend to hold the market at least steady this week.
FEEDER CATTLE:
With the corn contracts pushing a $0.12 to $0.15 rally through the day's close, feeder's sunk to the backburner and closed lower. August feeders closed $1.90 lower at $171.97, September feeders closed $1.75 lower at $174.55 and October feeders closed $1.45 lower at $176.82. The corn market's lead took the gusto out of the feeder cattle market's rally, technically speaking, but demand continues to be impressive throughout the countryside. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, at their midsession point and compared to two weeks ago, feeder steers were trading $5.00 to $8.00 higher, and feeder heifers were trading $6.00 to $12.00 higher. Steers calves were selling $10.00 to $12.00 higher, and heifer calves were trading $2.00 to $6.00 higher. The CME Feeder Cattle Index for June 3: not available at this time.
LEAN HOGS:
The lean hog complex closed lower as the market couldn't defend itself from the doggish tones that crept into Monday's complex. July lean hogs closed $1.77 lower at $108.97, August lean hogs closed $1.35 lower at $106.70 and October lean hogs closed $0.80 lower at $93.15. The cash market didn't see much interest throughout Monday's hours, but the slightly weaker tones in the day's final pork cutout value could be overlooked by an aggressive slaughter pace. Pork cutouts total 320.95 loads with 270.51 loads of pork cuts and 50.44 loads of trim. Pork cutout values: down $0.59, $108.79. Monday's slaughter is estimated at 475,000 head - 473,000 head more than a week ago and 4,000 head less than a year ago. The CME Lean Hog Index for June 2: up $1.02, $106.05.
TUESDAY'S CASH HOG CALL: Slightly higher. Given that Monday's cash hog market didn't see much demand, I'd suspect that prices are a little better come Tuesday and, more importantly, that larger volumes are traded.
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