GENERAL COMMENTS:
The livestock complex is trading mostly lower heading into Monday afternoon as the market is reacting negatively to the onset of higher corn prices. If corn prices cool off, cattle contracts could begin to trade steady as they could look to last Friday's Cattle on Feed report for support; but so much is hinging on what corn prices do this week. July corn is up 14 1/4 cents per bushel and July soybean meal is up $2.20. The Dow Jones Industrial Average is down 97.23 points.
LIVE CATTLE:
The live cattle market is trading timidly. Traders are cautious as corn prices jumped early Monday and they are chewing over last Friday's news that a five-year old cow in South Carolina was found to have had an atypical case of Bovine Spongiform Encephalopathy (BSE). Thankfully the cow never made it into the processing houses and was condemned after testing, therefore posing no threat to the food supply chain. But even so, traders like "news" to trade, and the combination of Friday's announcement mixed with higher corn prices seems to be offsetting last week's advancements in the cash market and the neutral to somewhat supportive Cattle on Feed report released Friday afternoon. June live cattle are down $0.97 at $164.75, August live cattle are down $0.95 at $163.35 and October live cattle are down $0.50 at $167.95. New showlists appear to be mixed, higher in Nebraska/Colorado but lower in Kansas and Texas.
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 are higher: choice up $0.62 ($301.72) and select up $1.40 ($285.34) with a movement of 40 loads (26.52 loads of choice, 7.27 loads of select, zero loads of trim and 6.14 loads of ground beef).
FEEDER CATTLE:
With corn prices jumping $0.07 to $0.14 higher, the feeder cattle contracts are seeming to grumble as they trade lower into Monday's noon hour. May feeders are up $0.32 at $206.60, August feeders are down $1.05 at $234.05 and September feeders are down $0.87 at $237.07. If corn prices stabilize and begin to trade steady, then feeders stand a chance at trading higher. But until there's a break in corn, feeders will likely be under pressure.
LEAN HOGS:
It's another bitter day in the lean hog complex as the futures continue to trade lower. Some of the market's weakness likely stems from the onset of higher corn prices, which continues to pressure producers' thin bottom line. Not to mention, there's still a level of uncertainty about how the market will be shaken with the Prop. 12 ruling. Needless to say, the market has plenty of negative factors to sort through, and it could desperately use some positive support. June lean hogs are down $0.67 at $82.35, July lean hogs are down $0.55 at $82.55 and August lean hogs are down $0.72 at $80.80.
The projected CME Lean Hog Index for 5/19/2023 is up $0.44 at $79.57 and the actual index for 5/18/2023 is up $0.71 at $79.13. Hog prices are lower on the Daily Direct Morning Hog Report, down $4.10 with a weighted average of $75.42, ranging from $75.00 to $83.00 on 3,160 head and a five-day rolling average of $78.02. Pork cutouts total 145.89 loads with 129.48 loads of pork cuts and 16.42 loads of trim. Pork cutout values: up $1.30, $85.68.
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