GENERAL COMMENTS:
Tuesday ended up being a positive day for the livestock complex as all three of the markets closed higher. No cash cattle trade developed, but as feedlots seek out steady prices, they know they're going to be faced with opposition from packers. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.79 with a weighted average of $73.59 on 6,363 hogs. July corn closed down 11 3/4 at $5.848 and July soybean meal closed down $7.90 at $419.00. The Dow Jones Industrial Average is down 56.55 at 33,562.14.
LIVE CATTLE:
The live cattle complex was timid to start the day out but as the corn complex began to trade softer, the live cattle complex grew stronger and ultimately closed all of its contract more than $1.00 higher by Tuesday's end. June live cattle closed $1.50 higher at $163.925, August live cattle closed $1.48 higher at $161.55 and October live cattle closed $1.20 higher at $165.325. At this point, it's starting to look like the market is again going to chop in a sideways trading range, but that could easily be influenced by the cash cattle trade that develops later this week. Feedlots are aiming for steady prices, but even that's going to be a challenge as packers have cattle committed for the deferred delivery option and as they've gained a foothold on the spot cash market. No bids nor asking prices are known yet. Trade will likely develop late Wednesday or potentially even later in the week, depending on how committed feedlots are to getting steady prices.
Tuesday's slaughter is estimated at 128,000 head, 1,000 head more than a week ago and 4,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.18 ($307.38) and select down $0.23 ($284.89) with a movement of 121.48 loads (75.80 loads of choice, 22.70 loads of select, 10.47 loads of trim and 12.51 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. Feedlots are aiming for steady prices, which, in a market like this, feels similar to getting higher prices.
FEEDER CATTLE:
The feeder cattle complex only grew stronger throughout the day as the corn contracts closed lower and allowed traders to confidently push the feeder cattle market higher. With the nearby corn contracts rounding out the day $0.11 to $0.14 lower, it took little effort for traders to drive the contracts $2.50 to $3.00 higher before the day's end. The live cattle complex was also to thank as its market closed higher which also gave feeders some comfortable technical backing. May feeders closed $2.50 higher at $205.925, August feeders closed $3.03 higher at $226.125 and September feeders closed $3.00 higher at $229.65. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week feeder steers traded steady. Feeder heifers traded steady to $2.00 higher with some instances of heifers weighing 800 to 900 pounds trading 500 to 600 lower. Steer calves were lightly tested but those that did sell were trading steady to $3.00 higher. Heifer calves sold $6.00 to $8.00 higher. Feeder cattle supply over 600 pounds was 75%. The CME Feeder Cattle Index for May 8: down $0.59, $199.42.
LEAN HOGS:
Whether it was the fact that corn traded lower throughout the day or the fact that both pork cutout values and cash prices closed higher -- by Tuesday's end, the lean hog complex had successfully traded its contracts higher. June lean hogs closed $1.10 higher at $84.40, July lean hogs closed $1.22 higher at $86.50 and August lean hogs closed $1.07 higher at $87.27. Yes, the carcass price may have only closed $0.15 higher than Monday's end price but a higher close is a higher close! No one had a runaway day that skewed the carcass price, and the only two cuts that closed slightly lower were the picnic and the loin -- both of which were down less than a dime. Pork Cutouts totaled 334.92 loads with 294.58 loads of pork cuts and 40.34 loads of trim. Pork cutout values are up $0.15 at $82.09. Tuesday's slaughter is estimated at 451,000 head, 19,000 head less than a week ago and 27,000 head less than a year ago. The CME Lean Hog Index for May 5: down $0.11, $74.42.
WEDNESDAY'S HOG CALL: Steady to somewhat higher. Packers weren't overly aggressive in Tuesday's cash market, but with pork cutout values having closed higher, they may opt to procure more hogs on Wednesday.
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