GENERAL COMMENTS:
It was another rallying day for the livestock complex as the contracts closed mostly higher. Both the live cattle and feeder cattle markets closed fully higher, but the nearby lean hog contracts struggled slightly. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $3.53 with a weighted average price of $85.29 on 7,205 head. July corn is down 11 1/2 cents per bushel and July soybean meal is up $3.40. The Dow Jones Industrial Average is down 199.90 points.
LIVE CATTLE:
The live cattle market embraced Monday's trade and roared into the new week with vengeance, seeming to be just as motivated as the market was last week. Besides the undeniable support that's stemmed from the rallying cash cattle market, it's also been extremely helpful that boxed beef prices have remained as strong as they are. Typically during this time, we'd expect to see some seasonal pressure but that's simply not been the case this year. June live cattle closed $0.72 higher at $177.15, August live cattle closed $0.37 higher at $173.27 and October live cattle closed $0.32 higher at $176.32. New showlists appear to be larger in all major feeding states, especially in Kansas. Monday's slaughter is estimated at 121,000 head, incomparable to last week but 2,000 head less than a year ago.
Last week, Northern dressed cattle traded mostly at $292, which is $8.00 higher than the previous week's weighted average and Southern live cattle traded from $175 to $180, but mostly at $178 to $180, which is $7.00 to $9.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 93,042 head. Of that, 72% (66,859 head) were committed to the nearby delivery, while the remaining 28% (26,183 head) were committed to the deferred delivery.
TUESDAY'S CATTLE CALL: Higher. With boxed beef prices continuing to trade higher and front-end supplies of market-ready cattle still thin, feedlots stand an excellent chance at holding the market steady if not advancing it come yet again this week.
FEEDER CATTLE:
The feeder cattle contracts had no issues trading higher as the live cattle complex continues to lend ample support and as the nearby corn contracts closed $0.05 to $0.11 lower. The feeder cattle market has a big week ahead of it as the first big feeder cattle sale of the summer debuts later this week. Superior Livestock Auction will host their Corn Belt Classic sale, where feeder steers and heifers will begin to set the tune for this fall's feeder cattle market. August feeders closed $0.70 higher at $242.60, September feeders closed $0.62 higher at $245.62 and October feeders closed $0.65 higher at $247.65. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to their last sale two weeks ago and at their midsession point, feeder steers were trading $10.00 to $15.00 higher and feeder heifers were trading $8.00 to $10.00 higher. Stocker steers and heifers were trading steady as most grass orders have been stocked. Steer calves were trading $10.00 to $20.00 higher and heifer calves were selling steady to $5.00 higher. Feeder cattle supply over 600 pounds was 59%. The CME Feeder Cattle Index for June 2: up $8.08, $216.12.
LEAN HOGS:
The lean hog complex was never able to get its nearby contracts onboard with the idea of trading higher, but the market's deferred contracts closed higher. Tuesday's market may stand more of a chance at trading higher given that Monday's afternoon cash prices and pork cutout values both closed higher. It's a little misleading, however, to note that pork cutout values closed higher as the carcass prices was heavily swayed by a $24.51 jump in the belly price. June lean hogs closed $1.40 lower at $85.32, July lean hogs closed $0.50 lower at $84.15 and August lean hogs closed $0.67 lower at $81.62. Pork cutouts totaled 295.00 loads with 266.67 loads of pork cuts and 28.33 loads of trim. Pork cutout values: up $4.34, $89.06. Monday's slaughter is estimated at 467,00 head, incomparable to last week but 6,000 head less than a year ago. The CME lean hog index 6/1/2023: up $0.89, $80.52.
TUESDAY'S HOG CALL: Steady to somewhat higher. It was surprising to see packers actively engaged in Monday's market. They didn't buy a large volume of hogs, but enough to where prices were higher, which could mean that they're short bought.
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