GENERAL COMMENTS:
As the day traded on, the livestock complex grew stronger throughout Tuesday's market. Heading into Wednesday, the cash cattle market will likely begin to trade, and prices are expected to remain steady. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $4.65 with a weighted average of $116.85 on 14,307 head. July corn is up 14 1/2 cents per bushel and July soybean meal is up $10.30. The Dow Jones Industrial Average is up 264.36 points.
LIVE CATTLE:
The live cattle contracts rounded out the day higher as traders cling to the positive morale that the market possesses. The August live cattle contract lead the live cattle sector with its higher close, but still the market wasn't able to take out Monday's high point. Heading into Wednesday's market, all eyes will be on the cash cattle complex as traders need to see strong fundamental support in order to push trade higher again. The cash cattle market hasn't seen any trade develop yet, but come Wednesday business is expected to develop. June live cattle closed $0.90 higher at $133.72, August live cattle closed $1.22 higher at $134.12 and October live cattle closed $0.97 higher at $140.07.
Tuesday's slaughter is estimated at 126,000 head, steady with a week ago but 5,000 head more than a year ago. Asking prices in the South remain at $137 to $138, and the North has yet to disclose their asking prices.
Boxed beef prices closed mixed: choice up $2.12 ($271.70) and select down $0.32 ($250.77) with a movement of 86 loads (43.13 loads of choice, 14.64 loads of select, 5.20 loads of trim and 23.34 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Given that cattle have yet to trade, feedlots are seeming very committed to seeing cattle trade at steady prices.
FEEDER CATTLE:
The feeder cattle contracts grew stronger as the day traded on, and even though the corn contracts rounded out the day $0.11 to $0.12 higher, the feeder cattle contracts clung to the market's fundamental support and closed higher as well. August feeders closed $0.47 higher at $172.45, September feeders closed $0.20 higher at $174.75 and October feeders closed $0.02 higher at $176.85. Helping straighten the feeder cattle market's backbone was that the live cattle market was able lend support in the fashion of its higher close, but also in the sense that feedlots are gunning for at least steady prices this week. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to two weeks ago, on a test of 7,256 head, steers traded $3.00 to $8.00 higher except those weighing 650 to 700 pounds as they traded steady to $3.00 lower. Heifers traded $4.00 to $8.00 higher expect those weighing 950 to 1,000 pounds as they sold steady to $1.00 higher. Demand for this large offering was exceptional and it was noted that several farmer feeders jumped on board to bid on green cattle. The CME Feeder Cattle Index for June 6: down $0.04, $158.49.
LEAN HOGS:
The lean hog complex had a mixed day with the futures market closing modestly higher, pork cutout values closing weaker, but yet cash hog prices jumped over $4.00 higher and sold over 14,000 head. The futures market is again looking for strong fundamental cues, and even though the cash market performed exceptionally well, traders are going to have a hard time looking past the weaker pork cutout close. None of the cuts fell absurdly lower as the ham saw the biggest reduction loosing $4.01 throughout the day. Nevertheless, it's likely that the hog market trades cautiously throughout Wednesday's complex as the market longs for reassurance. July lean hogs closed $0.30 higher at $109.27, August lean hogs closed $0.40 higher at $107.10 and October lean hogs closed $0.50 higher at $93.65. Pork cutouts totaled 346.45 loads with 326.60 loads of pork cuts and 19.84 loads of trim. Pork cutout values: down $0.96, $107.83. Tuesday's slaughter is estimated at 479,000 head, 12,000 head more than a week ago and 4,000 head less than a year ago. The CME Lean Hog Index for June 3: up $1.29, $107.34.
WEDNESDAY'S CASH HOG CALL: Steady. Given that Tuesday's cash hog market jumped over $4.00 higher, it's likely that Wednesday sees aggressive buying again but that prices remain steady.
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