GENERAL COMMENTS:
It was a mixed day for the livestock complex as the cattle contracts faced opposition while the lean hog complex continued to climb higher. The cash cattle market won't likely see any substantial trade develop until Thursday as packers and feedlots will go toe to toe again. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.73 with a weighted average price of $95.56 on 28,139 head. July corn is up 3 1/2 cents per bushel and July soybean meal is down $3.60. The Dow Jones Industrial Average is down 210.83 points.
LIVE CATTLE:
The live cattle complex traded unenthusiastically throughout Tuesday's market as traders kept an arm's distance from the marketplace and were hesitant about supporting the complex ahead of seeing what this week's Cattle on Feed report presents, or before seeing what the week's cash cattle trade amounts to. August live cattle closed $2.02 lower at $169.70, October live cattle closed $1.90 lower at $173.45 and December live cattle closed $1.70 lower at $177.40. The cash cattle market did see an early bid offered around the noon hour for $178 in the South, which, within a couple hours grew to $180, but feedlots opted to pass on the offer because it's substantially lower than last week's weighted average. The market may be seeing a little seasonal pressure, but the fact remains that front-end supplies of market-ready cattle and still thin and that demand is robust, which continues to bode well for feedlots. Tuesday's slaughter is estimated at 127,000 head, 1,000 head more than a week ago and 1,000 head less than a year ago.
Last week, Northern dressed cattle traded for mostly $296 which is $4.00 lower than the previous week's weighted average. It's important to note that some of the dressed cattle bought last week were expected to ship on Saturday -- again indicating just how short bought packers are. Southern live cattle traded for mostly $186, which is also $4.00 lower than the previous week's weighted average.
Boxed beef prices closed lower: choice down $3.23 ($336.91) and select down $2.83 ($307.93) with a movement of 121 loads (77.86 loads of choice, 24.65 loads of select, 10.75 loads of trim and 8.01 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. It's tough telling what this week's cash cattle trade will amount to as know that packers are short bought, but packers are also desperate to see the cash cattle market worked lower.
FEEDER CATTLE:
As corn prices gained strength throughout the afternoon, adversely the feeder cattle complex grew weaker and ultimately closed $2.00 to $2.77 lower. The feeder cattle market's weakness early this week stems from multiple fronts: the fact that later this week another Cattle on Feed report will be shared, the fact that corn prices are volatile and weather driven right now, and the s fact that traders are caught between a rock and a hard place as they want to continue to drive prices higher because they believe in the market's strong fundamentals, but, technically speaking, the contracts are enduring a period of exhaustion as they long for better interest. Nevertheless, Tuesday's market was slow and mundane for the feeder cattle complex as higher corn prices and a lack of support from the live cattle market ultimately led the feeder cattle complex to a weaker close by the day's end. August feeders closed $2.77 lower at $232.15, September feeders closed $2.55 lower at $235.62 and October feeders closed $2.52 lower at $237.77. The CME Feeder Cattle Index for June 19: down $1.18, $22.68.
LEAN HOGS:
The lean hog complex continued to rally throughout Tuesday's trade as traders found ample support in the market. July lean hogs closed $3.00 higher at $95.85, August lean hogs closed $2.52 higher at $93.20 and October lean hogs closed $1.52 higher at $81.60. Yes, pork cutout values may have closed lower, but that's largely because of the $6.05 drop in the belly. What's more encouraging to me than potentially anything else in the lean hog complex right now is the strength and stamina of futures complex. The market has remained committed to trading higher and, thanks to relatively stable support in pork cutout prices and better interest in the cash sector, traders are continuing to work higher and aren't seeming phased by the fact that they're nearing resistance threshold. Pork cutouts totaled 307.45 loads with 266.02 loads of pork cuts and 41.43 loads of trim. Pork cutout values: down $1.44, $94.62. Tuesday's slaughter is estimated at 469,000 head, 1,000 head less than a week and year ago. The CME Lean Hog Index for June 16: up $0.57, $88.21.
WEDNESDAY'S HOG CALL: Steady to somewhat higher. Packers were extremely aggressive in Tuesday's cash market as they bought close to 30,000 head, but that doesn't mean that all they're needs are fulfilled for the week.
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