GENERAL COMMENTS:
The livestock contracts mostly had a tough go throughout Monday's market as everyone questions what's next for our economy. As traders try to balance what higher interest rates and continued inflation will do to the economy with the market's mixed fundamentals -- the bear spreaders won Monday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.14 with a weighted average of $113.16 on 3,802 head. July corn is down 4 cents per bushel and July soybean meal is down $14.00. The Dow Jones Industrial Average is down 876.05 points.
LIVE CATTLE:
The live cattle complex took a beating throughout Monday's sellout as traders jumped out of the market in fears of what the expected higher interest rates could do to the economy combined with unwavering inflation. June live cattle closed $2.20 lower at $134.00, August live cattle closed $2.32 lower at $133.87 and October live cattle closed $2.05 lower at $139.92. While traders have every right to be concerned with our economy and its weakening state, cattle buyers are having to juggle its reality alongside that of the cattle market, which favors optimism largely due to the severe culling that's taken place over the last year. Given how aggressively packers chased the cash cattle market last week, it's fair to assume that they'll still need more cattle again this week and that prices could hold steady with last week's advancement. New showlists appear to be mixed somewhat higher in Kansas, larger in Nebraska/Colorado, but lower in Texas.
Monday's slaughter is estimated at 125,000 head, steady with a week ago and 8,000 head more than a year ago.
Last week's negotiated cash cattle market totaled 88,218 head. Of that, 82% (72,753 head) are committed for the nearby delivery, while the remaining 18% (15,465 head) are committed for the deferred delivery.
Boxed beef prices closed lower: choice down $0.78 ($270.54) and select down $1.44 ($247.45) with a movement of 93 loads (52.76 loads of choice, 28.57 loads of select, 7.36 loads of trim and 4.23 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Given that packers committed 82% of last week's volume to the nearby delivery, there are hints that they're short bought and need more cattle.
FEEDER CATTLE:
The feeder cattle contracts kept with their regression all the way through Monday's close. August feeders closed $3.15 lower at $171.32, September feeders closed $2.45 lower at $173.60 and October feeders closed $2.22 lower at $175.32. Again, the market's sharp sell-off largely stemmed from the fact that traders are concerned with where the market sits amid a weakening and unstable economy. Thankfully, that uncertainty didn't trick into the cash market and sale barns still saw strong interest. Even though Monday's markets closed lower, at the midsession point for the sale at Oklahoma National Stockyards, in Oklahoma City, Oklahoma, feeder steers were trading steady to $3.00 higher, and feeder heifers were trading $1.00 to $3.00 higher. Steers calves were trading unevenly steady, but heifer calves traded $3.00 to $5.00 stronger. The CME Feeder Cattle Index for June 10: down $1.58, $160.29.
LEAN HOGS:
The lean hog complex rounded out the day higher as the market was able to summon nearby support, and with the shot of support from a higher pork cutout value, traders deemed it safe to close slightly higher in the nearby contracts. July lean hogs closed $1.20 higher at $106.67, August lean hogs closed $0.65 higher at $104.40 and October lean hogs closed $0.10 higher at $92.67. Packers didn't pay much attention to Monday's cash market, but given that pork cutout values closed over $2.00 higher, packer demand should be stronger in Tuesday's market. Pork cutouts totaled 306.70 loads with 265.24 loads of pork cuts and 41.46 loads of trim. Pork cutout values: up $2.22, $111.38. Monday's slaughter is estimated at 473,000 head, 2,000 head less than a week ago and 1,000 head less than a year ago. The CME Lean Hog Index for June 9: down $0.12, $107.19.
TUESDAY'S CASH HOG CALL: Higher. Given that pork cutout values closed higher and that packers didn't buy very many hogs on Friday or Monday, Tuesday's market should be stronger.
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