GENERAL COMMENTS:
It was a mixed day for the livestock complex as feeders closed lower, live cattle closed higher and hogs rounded out the day mixed. It was nerving to see both hog and cattle slaughter speeds reduced and Monday's estimates revised. Heading into Wednesday, the market will be busy as Superior hosts their Corn Belt Classis sale and packers are expected to hunt the cash market more aggressively. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $6.09 with a weighted average of $119.25 on 17,652 head. July corn is down 1 cent per bushel and July soybean meal is down $4.10. The Dow Jones Industrial Average is down 151.91 points.
LIVE CATTLE:
The cash cattle market saw some light trade develop late Tuesday afternoon, but so few of cattle were traded that no trend was established. Prices in the North ranged anywhere from $224 to $230 dressed, and a few were noted as sold at $145 live too. In the South, live cattle traded for $137 to $139. Come Wednesday, the market will be pressured to see who's going to win this week's tug-of-war game, packers or feeders? Boding well for packers is the fact that entire marketplace is trending lower and that slaughter speeds are lagging this week. However, boding well for feedlots is that, even though the rest of the market is scaling back, live cattle closed slightly higher Tuesday afternoon, showlists are green and packers are indeed short bought. June live cattle closed $1.20 higher at $135.20, August live cattle closed $0.20 higher at $134.07 and October live cattle closed $0.22 higher at $140.15.
Tuesday's slaughter is estimated at 122,000 head, 4,000 head less than a week ago and steady with a year ago. Monday's slaughter was revised to 120,000 head, 5,000 head less than what was originally stated.
Boxed beef prices closed lower: choice down $1.10 ($269.44) and select down $0.63 ($246.82) with a movement of 135 loads (65.40 loads of choice, 33.38 loads of select, 13.86 loads of trim and 22.61 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. Given that packers are so short bought, if feedlots will work together and be willing to wait out the week, prices could easily be $2.00 to $3.00 higher again this week.
FEEDER CATTLE:
The feeder cattle contracts tucked their tail and kept with the market's descend throughout Tuesday's close, as the market couldn't seem to summon substantial support. Thankfully, even though the feeder cattle contracts closed lower, the corn market also closed lower. Largely this isn't so much of feeder cattle market tone and decision, but rather a sell out by equites and the market's doggish tone has tricked into the feeder complex. With cash cattle trading higher and the undeniable fact that there will be significantly fewer calves and feeders to be had this fall, buyers will have to juggle the market's factors and determine if outside pressures are significant enough to deter buyers from supporting the market. Wednesday, Superior Livestock Auction will kick off their Corn Belt Classic sale where 66,500 head of cattle are set to sell. August feeders closed $0.02 lower at $171.30, September feeders closed $0.25 lower at $173.35 and October feeders closed $0.05 lower at $175.27. The CME Feeder Cattle Index for June 13: down $0.11, $160.18.
LEAN HOGS:
The lean hog market was a mixed bag through Tuesday's close as, technically, the market saw mixed interest as traders weren't confident in the market. Unfortunately, pork cutout values closed over $2.00 lower, but cash hog prices blew the top off the market. Packers didn't participate much in Friday's nor Monday's cash hog market, but they showed up come Tuesday! Cash hog prices closed $6.09 by the afternoon, equating to a weighted average of $119.25, ranging from $110.00 to $122.00 and on 17,652 head. In two week's (June 29) the market will see another Quarterly Hogs and Pigs report released, which will help give a better understanding as to how supply-demand mechanics will trend throughout the remaining second quarter of 2022, and into the second half of the year. Pork cutouts totaled 356.28 loads with 333.27 loads of pork cuts and 23.01 loads of trim. Pork cutout values: down $2.71, $108.67. Tuesday's slaughter is estimated at 474,000 head, 5,000 head less than a week ago and 12,000 head less than a year ago. Monday's slaughter was revised to 460,000 head, 13,000 head less than what was originally stated. The CME Lean Hog Index for June 10: up $0.21, $107.40.
WEDNESDAY'S CASH HOG CALL: Lower. Given than prices jumped over $6.00 higher, packers will likely be active participants again in Wednesday's market, but prices will likely wane.
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