GENERAL COMMENTS:
Stepping into Monday's trade, the livestock contracts haven't been met with much support. The live cattle sector is patiently waiting to see if the market musters the technical backing that it needs in order to support a rally through the contracts, and in terms of the cash cattle market, sellers are expected to try to hold the market at least steady in the North as supplies are still manageable. July corn is up 15 cents per bushel and July soybean meal is down $0.30. The Dow Jones Industrial Average is up 14.32 points.
LIVE CATTLE:
After last week's aggressive push, all eyes are on this week's live cattle market as everyone wants to know what the tone will be. Showlists are still manageable and carcass weights are declining, both of which bode well for sellers. Meanwhile, the seasonality of June is fickle. June is an important month for beef slaughter as it can either propel or cripple the market in regard to on feed numbers during the hottest summer months. Historically speaking, June isn't a month when rallies are anticipated. But, as the market wrestles with the fact that leverage is shifting from packers to feedlots/cow-calf producers, there's a lot up in the air. June live cattle are down $0.45 at $133.15, August live cattle are down $0.32 at $133.52 and October live cattle are down $0.15 at $139.55. Northern feedlots are expected to try to hold the market steady this week as showlists are still current.
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 are higher: choice up $2.11 ($269.37) and select up $2.90 ($252.92) with a movement of 21 loads (12.29 loads of choice, 4.34 loads of select, zero loads of trim and 4.80 loads of ground beef).
FEEDER CATTLE:
The corn market is pushing into the new week with a modest $0.10 to $0.13 rally in its nearby contracts. Last week the feeder cattle market was able to rip higher as the August contract jumped $7.55 higher and the September contract jumped $7.00 higher. The feeder cattle market is patiently waiting to see how the nation's sales perform in the upcoming weeks as feeder cattle will begin to sell, but largely, the market will be dictated by weather, the corn market's behavior and the live cattle market's positive/negative attitude. August feeders are down $1.47 at $172.40, September feeders are down $1.52 lower at $174.85 and October feeders are down $1.27 at $177.00.
LEAN HOGS:
The lean hog market is finding no mercy through Monday's start as the complex sees its contracts drop sharply lower. July lean hogs are down $0.202 at $108.72, August lean hogs are down $1.87 at $106.17 and October lean hogs are down $1.37 at $92.57. As traders weigh out the needs of supply versus demand and fundamental support versus technical concern -- the market has much to think about. We know that the midday pork cutout report can be fickle, but if Monday's pork cutout values do indeed close higher, the market may see more support in Tuesday's market.
The projected lean hog index for June 3 is up $1.29 at $107.34, and the actual index for June 2 is up $1.02 at $106.05. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.06 with a weighted average of $111.58, ranging from $106.00 to $116.00 on 2,635 head and a five-day rolling average of $112.39. Pork cutouts total 173.66 loads with 134.54 loads of pork cuts and 39.12 loads of trim. Pork cutout values: up $6.88, $116.26.
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