Overall, it was an uneventful day for the livestock complex. Higher corn prices drove both the live cattle and lean hog markets lower, but phenomenal demand allowed for the feeder cattle contracts to still close higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.91 with a weighted average of $76.52 on 3,488 head. July corn is up 16 1/2 cents per bushel and July soybean meal is up $3.10. The Dow Jones Industrial Average is down 140.05 points.
LIVE CATTLE:The live cattle complex didn't do much throughout Monday's market as traders stewed over the onset of higher corn prices. The market did, however, close mixed with the nearby contracts ending slightly lower and the deferred contracts closing slightly higher. Traders are again going to look for support from the market's fundamentals as the futures complex is trading at the upper end of its three-month trading range. Feedlots are going to hard pressed to get cattle sold much better than steady as packers will be running lighter kills later this week and into early next week for the Memorial Day holiday. June live cattle closed $0.67 lower at $165.05, August live cattle closed $0.70 lower at $163.60 and October live cattle closed $0.30 lower at $168.15. New showlists appear to be mixed, higher in Nebraska/Colorado but lower in Kansas and Texas. Monday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago but steady with a year ago.
Last week, Northern dressed deals had a full range of $275 to $282, generally $280 to mostly $282, which is steady to $2 higher than the previous week's weighted averages. Note that some of the cattle that were sold in Nebraska on Wednesday were shipped as early as Friday. Southern live deals had a range of $168 to $176, mostly $170, which is fully steady with the prior week's weighted averages. Last week's negotiated cash cattle trade totaled 75,035 head. Of that, 76% (56,826 head) were committed for the nearby delivery, while the remaining 24% (18,209 head) were committed to the deferred delivery option.
Boxed beef prices closed mixed: choice up $2.80 ($303.90) and select down $0.51 ($283.43) with a movement of 95 loads (60.68 loads of choice, 14.80 loads of select, 6.22 loads of trim and 12.88 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. It was telling in last week's market when packers were buying cattle on Wednesday and needing them delivered as soon as Friday. It's beyond evident that packers are short bought and that market-ready cattle are in short supply. But it's also likely that, with the Memorial Day holiday nearing, packers run lighter kill schedules this week, making it a coin toss on how cash cattle prices will fare.
FEEDER CATTLE:Surprisingly enough, the feeder cattle complex was still able to close higher even though nearby corn prices rounded out the day $0.08 to $0.16 higher. Demand is the feeder cattle market's backbone right now and with feeder cattle/calves in short supply, prices are continuing to trade higher. The spot and nearby contracts suffered slightly through Monday's end, but all the deferred months closed mildly higher which is quite the feat when corn prices are rallying like they are. August feeders closed $0.20 lower at $234.90, September feeders closed $0.10 lower at $237.85 and October feeders closed $0.07 higher at $239.52. Joplin Regional Stockyards in Carthage, Missouri, at their midsession report, was reporting that feeder steers and heifers were selling $2.00 to $5.00 higher. Feeder cattle supply over 600 pounds was 41%. The CME Feeder Cattle Index for May 19: up $2.34, $204.70.
LEAN HOGS:It was a pitiful Monday for the lean hog complex as traders continued to allow the contracts to drift lower through Monday's close -- not seeming to find sufficient support to merit a steady to somewhat higher close. June lean hogs closed $1.20 lower at $81.82, July lean hogs closed $0.97 lower at $82.15 and August lean hogs closed $1.20 lower at $80.30. Pork cutouts were able to close slightly higher as the $9.62 jump in the belly helped sway the carcass price to a positive end. But unfortunately, this also means that Tuesday's carcass value could be under pressure as the belly has been known for volatile swings. Pork cutouts total 288.15 loads with 264.00 loads of pork cuts and 24.15 loads of trim. Pork cutout values: up $0.39, $84.77. Monday's slaughter is estimated at 473,000 head - 9,000 head more than a week ago and 11,000 head more than year ago. Friday's hog slaughter was revised to 458,000 head. The CME Lean Hog Index for May 18: up $0.71, $79.13.
TUESDAY'S HOG CALL: Lower. Hog prices were sharply lower Monday afternoon which could either mean that packers bought aggressively enough last week to avoid having to participate much in this week's market, or prices could have been lower on Monday simply because packers don't usually participate much in the cash sector on Mondays until they can see how nearby demand is going to shape up.
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