GENERAL COMMENTS:
It was a tough start to the week for the livestock complex as the commodity market's lower tone drove most of the livestock contracts lower. The lean hog market was able to advance its nearby contracts higher as phenomenal demand supported the market's move, as packers bought aggressively in the cash market and consumers were aggressive at the meat counter too. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $6.24 with a weighted average of $120.46 and on 13,765 head. December corn is down 29 cents per bushel and December soybean meal is down $11.60. The Dow Jones Industrial Average is down 129.44 points.
LIVE CATTLE:
The live cattle market was unable to gain any support as the entire commodity market struggled Tuesday. August live cattle closed $1.67 lower at $132.92, October live cattle closed $1.50 lower at $138.47 and December live cattle closed $1.72 lower at $144.05. The cash cattle market didn't see any trade develop and it's likely that, with the market's lower tone, packers are hoping to let the market's weakness worry feedlots and push them into trading cattle for lower money again this week. This week's showlists is mixed as there's less cattle in Texas and Kansas, but more cattle in Nebraska and Colorado.
Tuesday's slaughter is estimated at 126,000 head, steady with a week ago and 6,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 71,137 head. Of that, 65% (46,299 head) were committed for the nearby delivery while the remaining 35% (24,838 head) were committee for the deferred delivery.
Boxed beef prices closed higher: choice up $0.35 ($264.17) and select up $0.23 ($240.70) with a movement of 35 loads (24.08 loads of choice, 4.10 loads of select, zero loads of trim and 6.35 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Seeing that only 71,137 head of cattle traded last week is good for feedlots as packers will need to buy more cattle this week in order to secure inventory for their upcoming kills.
FEEDER CATTLE:
With the commodity market taking a royal beating, the feeder cattle contracts weren't able to rally, even though the corn market closed $0.18 to $0.29 lower as traders were hesitant traders throughout the day. August feeders closed $1.80 lower at $172.70, September feeders closed $1.55 lower at $176.10 and October feeders closed $1.47 lower at $178.97. Feeder cattle sales were mostly obsolete throughout Tuesday as market participants slowly get back to the week's grind after the long weekend. The sharp decline in corn prices should help country buyers feel better about buying cattle later this week as any help on inputs is appreciated this year. The CME Feeder Cattle Index for July 1: unavailable at this time.
LEAN HOGS:
While the rest of the livestock complex and majority of commodity market traipsed lower, the nearby lean hog contracts swung for higher prices and didn't come up shorthanded! July lean hogs closed $2.55 higher at $112.15, August lean hogs closed $2.97 higher at $105.95 and October lean hogs closed $0.47 higher at $89.40. The market's supportive jump in its nearby lean hog contracts was well supported by the cash and cutout values. Cash prices closed $6.24 higher and on a sizeable movement of 13,765 head. Pork cutout values weren't caught sleeping throughout the day either as they closed $5.73 stronger, with the biggest advancement made in the bellies, which closed $20.48 stronger, it's obvious Americans are still hungry for their bacon and spareribs. Pork cutouts totaled 306.23 loads with 254.72 loads of pork cuts and 51.51 loads of trim. Pork cutout values: up $5.73, $114.48. Tuesday's slaughter is estimated at 458,000 head, 8,000 head more than a week ago and 6,000 head less than a year ago. The CME Lean Hog Index for June 30: down $0.14, $110.70.
WEDNESDAY'S CASH HOG CALL: Steady. Given that pork cutouts are seeing ample support, it wouldn't be unlikely to see packers aggressive in Wednesday's market, even though prices are higher as they need the product to fulfill orders.
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