GENERAL COMMENTS:
Monday ended up being an extremely supportive day for the livestock complex as all three of the livestock markets closed higher. So long as demand remains supportive for both the pork and beef markets throughout the week, the contracts stand a chance at keeping this upward momentum. Hog prices were again unavailable on the Daily Direct Afternoon Hog Report due to confidentiality issues. However, we could see that 3,225 head have traded and that the market's five-day rolling average now sits at $76.32. July corn is up 6 1/4 cents per bushel and July soybean meal is down $2.00. The Dow Jones Industrial Average is up 47.98 points.
LIVE CATTLE:
The live cattle complex was able to close higher after traders grew more confident in the market's position as the day traded on. Packers weren't able to get too many cattle bought and committed to the deferred delivery option last week, which means that feedlots stand a fighting chance at holding the cash market steady this week. So long as boxed beef prices can show moderate support, feedlots may be able to hold the market. June live cattle closed $0.07 lower at $164.32, August live cattle closed $0.30 higher at $162.75 and October live cattle closed $0.97 higher at $167.12. New showlists appear to be slightly higher in Kansas, and Nebraska/Colorado but somewhat lower in Texas. Bids and asking prices have yet to be established. Significant trade volume will likely be delayed until Wednesday or possibly later in the week. Monday's slaughter is estimated at 126,000 head, steady with a week ago and 3,000 head more than a year ago.
Throughout last week, Southern live cattle traded for $170, which is $2.00 lower than the previous week's weighted average, and Northern dressed cattle traded for mostly $280, which is $1.00 lower than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 81,474 head. Of that, 71% (57,882 head) were committed to the nearby delivery while the remaining 29% (23,592 head) were committee for the deferred delivery.
Boxed beef prices closed mixed: choice down $2.63 ($301.98) and select up $0.03 ($284.71) with a movement of 91 loads (62.16 loads of choice, 14.21 loads of select, 4.28 loads of trim and 10.53 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Given that packers weren't able to commit a plethora of cattle to the deferred delivery option last week, feedlots stand a chance at holding the market steady this week.
FEEDER CATTLE:
Even though the nearby corn contracts closed $0.06 to $0.07 higher, the feeder cattle contracts were able to maintain their rallying spirit through closing. Excellent demand has helped maintain the market's rallying momentum, and so long as corn prices don't pose much more of a threat, feeders may be able to keep their lively spirit throughout the week. May feeders closed $1.02 higher at $206.50, August feeders closed $2.07 higher at $231.05 and September feeders closed $1.87 higher at $233.85. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week and at their midsession point, feeder steers and steer calves were trading steady to $2.00 higher. Feeder heifers and heifer calves traded steady. Demand was noted to be extremely good for the light number of receipts offered. Feeder cattle supply over 600 pounds was 76%. The CME Feeder Cattle Index for May 12: up $1.53, $202.11.
LEAN HOGS:
The lean hog complex rallied throughout Monday's market and was able to close out the day on a sharply higher note. All the contracts closed $1.00 to $2.00 higher as traders felt encouraged by the market's demand early this week. Pork cutout values close moderately higher with the biggest gains being seen in the belly (up $5.53) and the rib (up $3.82). The cash hog market didn't see much interest as prices were hid behind confidentiality clauses, but needless to say, we can conclude that there wasn't much interest in the market as we couldn't see prices and only 3,225 head traded. June lean hogs closed $2.05 higher at $86.15, July lean hogs closed $2.17 higher at $87.50 and August lean hogs closed $1.65 higher at $87.72. Pork cutouts totaled 306.67 loads with 263.46 loads of pork cuts and 43.22 loads of trim. Pork cutout values: up $0.97, $84.38. Monday's slaughter is estimated at 469,000 head, 1,000 head more than a week ago and 2,000 head more than a year ago. The CME Lean Hog Index for May 11: up $0.51, $75.91.
TUESDAY'S HOG CALL: Higher. Monday's cash hog market saw hardly any business develop whatsoever, so seeing some improvement come Tuesday should be attainable for the market, especially given that pork cutout values closed higher.
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