GENERAL COMMENTS:
The cattle contracts rallied throughout Monday's market, and feedlots desperately hope that this stronger tone trails into the middle part of the week and helps maintain a strong cash market. The lean hog complex veered lower as traders seem to be looking for a better understanding of the market's trajectory, which will hopefully come in Wednesday's report. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $5.10 with a weighted average of $115.13 on 4,586 head. July corn is down 6 cents per bushel and July soybean meal is up $10.10. The Dow Jones Industrial Average is down 62.42 points.
LIVE CATTLE:
The live cattle market waltzed through Monday's trade with a stronger tone, but the spot August live cattle contract didn't overwork itself by any measure. August live cattle closed $0.10 higher at $133.47, October live cattle closed $0.37 higher at $140.12 and December live cattle closed $0.55 higher at $145.80. What was incredibly surprising about Monday's market was the uptick in boxed beef prices. Over the last three weeks, boxed beef prices have trended mostly lower, but come Monday, choice cuts closed over $3.00 higher and select cuts closed slightly higher as well. Packers were able to get close to 94,590 head of cattle bought last week, and 28% of them were committed for the deferred delivery. Boxed beef prices are expected to trend lower in July, like they usually do, but if prices can show some support this week, it may entice packers to keep scouting the cash market and keep prices elevated through the week. No bids or asking prices were noted throughout Monday's market and it's likely that trade waits until Wednesday to really develop. New showlists appear to be mixed higher in Nebraska/Colorado, but lower in Kansas and Texas.
Monday's slaughter is estimated at 125,000 head, 1,000 head more than a week ago and 6,000 head more than year ago.
Last week's negotiated cash cattle trade totaled 94,598 head. Of that 72% (68,048 head) were committed for the nearby delivery, while the remaining 28% (26,550 head) were committed for the deferred delivery.
Boxed beef prices closed higher: choice up $3.70 ($268.68) and select up $0.22 ($245.24) with a movement of 99 loads (55.75 loads of choice, 24.06 loads of select, 6.80 loads of trim and 11.98 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to somewhat higher. Given that supplies of market-ready cattle are so thin in the North, it's likely that feedlots hold out until later in the week for the prices they want, but Southern feedlots could sway either way.
FEEDER CATTLE:
It was an easy day for the feeder cattle contracts to close higher as the corn market traipsed anywhere from $0.06 to $0.21 lower and the deferred live cattle contracts continue to show promise of higher prices. August feeder cattle closed $1.62 higher at $174.12, September feeder cattle closed $1.72 higher at $176.80 and October feeder cattle closed $1.85 higher at $178.92. As corn prices continue to regress and the market is slowly absorbing the fact that supplies of feeder cattle are going to be more sparce than years past, the market has regained an optimistic tone and is seeing stronger demand. Plus, it's helpful when buyers are looking at the live cattle market and trying to justify all the inputs to finish these cattle that they see the live cattle contracts of 2023 mostly hovering at or above $150. At Joplin Regional Stockyards in Carthage, Missouri, compared to a week ago, feeder steers traded $5.00 to $8.00 higher and feeder heifers traded steady to $4.00 higher. The CME Feeder Cattle Index for June 24: down $0.62, $163.09.
LEAN HOGS:
The lean hog market started the day off lower, but as time advanced, the market grew weaker. July lean hogs closed $0.75 lower at $110.17, August lean hogs closed $1.90 lower at $104.87 and October lean hogs closed $1.30 lower at $91.02. The market's downward tone wasn't only seen throughout the futures market as both cash prices and pork cutout values also rounded out the day lower. Pork cutout values were mainly led lower by the dive in bellies, which sank $14.62 lower, and then was followed by a $3.33 regression in ham prices. It's likely that the market keeps this doggish tone until at least Wednesday's Quarterly Hogs and Pigs report is unveiled. Pork cutouts totaled 311.47 loads with 264.98 loads of pork cuts and 46.50 loads of trim. Pork cutout values: down $3.17, $109.03. Monday's slaughter is estimated at 466,000 head, 17,000 head more than a week ago and 11,000 head more than a year ago. The CME Lean Hog Index for June 23: up $0.22, $110.91.
TUESDAY'S CASH HOG CALL: Slightly higher. Packers have been pretty faithful to their buying practice of actively supporting the cash market two days out of the week, and it's not uncommon to see their cash interest increase by Tuesday.
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