GENERAL COMMENTS:
The live cattle complex was the sore loser throughout Tuesday's market as mostly the feeder cattle and lean hog contracts rallied throughout the day. No cash cattle trade was reported and it's likely that trade waits until later on Wednesday, or potentially Thursday, to develop as feedlots want at least steady prices this week. On the Daily Direct Afternoon Hog Report hog prices averaged $82.79 on 18,285 head. July corn is down 11 1/4 cents per bushel and July soybean meal is down $4.00. The Dow Jones Industrial Average is down 336.46 points.
LIVE CATTLE:
Traders appraised the marketplace throughout Tuesday's hours and, upon seeing just how aggressively the market traded on Friday and Monday, traders remained cautious Tuesday as they're looking for support in this week's complex to again drive prices higher. June live cattle closed $0.45 lower at $163.87, August live cattle closed $0.27 lower at $162.47 and October live cattle closed $0.20 lower at $166.92. Unfortunately, afternoon boxed beef prices did close lower, which puts a little pressure on Wednesday's market, but if cash prices can trade at least steady, traders will likely understand the seasonal pressure. No cash cattle trade was reported throughout Tuesday's market, but asking prices in the South are noted at $172. Trade could begin to develop on Wednesday but could hold off until even later in the week.
Tuesday's slaughter is estimated at 127,000 head, 1,000 head less than a week ago and steady with a year ago.
Boxed beef prices closed lower: choice down $2.51 ($299.47) and select down $0.36 ($284.35) with a movement of 136 loads (94.41 loads of choice, 25.22 loads of select, 5.71 loads of trim and 10.65 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady to $1.00 higher. Given that packers weren't able to get an overabundance of cattle committed to the deferred delivery option last week likely means that they'll need to actively procure cattle this week. If feedlots play their cards right, prices could easily trade steady to $1.00 higher.
FEEDER CATTLE:
The feeder cattle complex didn't seem to care what the live cattle market did throughout Tuesday's market, as its focus was on two things: cheaper corn prices and excellent demand throughout the countryside. August feeders closed $0.42 higher at $231.47, September feeders closed $0.47 higher at $234.32 and October feeders closed $0.45 higher at $236.22. It makes sense that the live cattle complex is somewhat hesitant given that, later this week, another Cattle on Feed report will be shared. Feeders continue to focus on their strong suits and simply hope that, by later this week, the live cattle market can trade higher. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, feeder steers sold $3.00 to $6.00 higher and feeder heifers sold $6.00 to $10.00 higher with some instances where four to five weight heifers sold up to $15.00 higher. Feeder cattle supply over 600 pounds was 49%. The CME Feeder Cattle Index for May 15: down $0.04, $202.07.
LEAN HOGS:
The lean hog complex closed mixed as the nearby contracts celebrated the onset of cheaper corn prices, but the deferred contracts weren't as lively throughout the day and ultimately closed lower. June lean hogs closed $1.05 higher at $87.20, July lean hogs closed $0.62 higher at $88.12 and August lean hogs closed $0.15 higher at $87.87. When you look at the demand picture shown in Tuesday afternoon's pork cutout report, the only real red flags came from the sharp decline in belly and rib prices. Other than those two cuts, prices fared extremely well, especially when you take into account that the belly alone fell $7.83. It was impressive, however, to see the day's cash hog market was able to move 18,285 head and average $82.79. Pork cutouts totaled 362.47 loads with 323.31 loads of pork cuts and 39.16 loads of trim. Pork cutout values: down $0.63, $83.75. Tuesday's slaughter is estimated at 470,000 head, 19,000 head more than a week ago and 6,000 head less than a year ago. Monday's hog slaughter was revised to 464,000 head. The CME Lean Hog Index for May 12: up $0.59, $76.50.
WEDNESDAY'S HOG CALL: Steady to somewhat lower. Packers were really aggressive in Tuesday's market, which likely means that they'll show less interest in the cash hog market come Wednesday.
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