GENERAL COMMENTS:
As the contracts work their way through Tuesday, the livestock complex has taken a very cautious approach following Monday's descend. The cash cattle market hasn't seen any bids develop yet, and it's likely that business holds off until Wednesday or later. July corn is down 6 1/2 cents per bushel and July soybean meal is down $3.70. The Dow Jones Industrial Average is down 224.02 points.
LIVE CATTLE:
The live cattle market is caught in a bit of a hard spot. On Monday, the markets tumbled lower as the Dow Jones closed 876.05 points lower and, combined with unbridled inflation and higher interest rates, it was enough bearish news to send anyone into a depressed state. While the market does what it does, the long-term trajectory of the cattle market is still the same: stronger, higher and bullish. If anything, the market has grown more optimistic over the last week as packers showed their cards in last week's market. Given that packers aggressively bought in last weeks market, and pushed prices $2.00 to $4.00 higher, there's no denying that they're short bought and going to have to run after cattle this week, and likely next week too. Bids have yet to develop and it's likely that trade waits until Wednesday to really develop as feedlots know they'll have to hold out and work together to get the prices they want. Asking prices in the South are noted at $138 to $140 and in the North at $230-plus. Thankfully, the futures market is attempting to recover some of what Monday threw away, but at this point it's only rallying modestly. June live cattle are up $1.02 at $135.02, August live cattle are up $0.42 at $134.22 and October live cattle are up $0.25 at $140.17.
Boxed beef prices are lower: choice down $0.04 ($270.50) and select down $0.30 ($247.15) with a movement of 66 loads (30.18 loads of choice, 14.45 loads of select, 7.01 loads of trim and 14.50 loads of ground beef).
FEEDER CATTLE:
As the corn market keeps its lower tone, the nearby feeder cattle contracts are attempting to trade somewhat higher. It's helping matters that the live cattle contracts and cash cattle market are trudging through Tuesday optimistically, but still feeders are hesitant. August feeders are up $0.37 at $171.70, September feeders are up $0.02 at $173.62 and October feeders are up $0.07 at $175.40. If the market continues to see strong interest throughout the countryside for calves and feeders, it's likely that the feeder cattle market will grow stronger if fundamental support doesn't weaken.
LEAN HOGS:
The lean hog contracts are seeing its spot July market trade higher, but other than that, the market is erring on the side of caution and trending lower. July lean hogs are up $0.12 at $106.80, August lean hogs are down $0.27 at $104.12, and October lean hogs are down $0.85 at $91.82. The cash hog market is seeing strong interest as midday prices are nearly $5.00 higher (up $4.88 from Monday) and packers have bought 7,861 head ahead of the noon hour. If pork cutout values can show support through Tuesday's close, then Wednesday could potentially have enough fundamental support to encourage traders to move higher technically.
The projected lean hog index for June 13 is up $0.73 at $108.13, and the actual index for June 10 is up $0.21 at $107.40. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.88 with a weighted average of $117.70, ranging from $111.00 to $122.00 on 7,861 head and a five-day rolling average of $116.41. Pork cutouts total 201.64 loads with 190.21 loads of pork cuts and 11.43 loads of trim. Pork cutout values: down $2.23, $109.15.
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