GENERAL COMMENTS:
Thus far, it's been a quiet start to the week's market as both the live cattle and feeder cattle contracts are trading lower. Meanwhile the lean hog complex is trading higher as both cash hog prices and pork cutout values are slightly higher. July corn is down 4 cents per bushel and July soybean meal is down $4.20. The Dow Jones Industrial Average is down 236.20 points.
LIVE CATTLE:
The live cattle complex is trading lower into Tuesday's noon hour as traders wonder the direction of this week's market. There's one single bid in Kansas being offered at $178, but that's well below last week's market and showlists are still thin -- likely meaning that no feedlots will jump at its arrival. August live cattle are down $1.32 at $170.40, October live cattle are down $1.27 at $174.07 and December live cattle are down $1.05 at $178.05. The cash cattle market won't likely see any trade develop until Thursday or Friday as feedlots realize that front-end supplies are thin and, if they're going to continue to pressure packers into paying upper end prices, they'll need to wait the week out patiently.
Last week, light trading took place in the North on Wednesday and Thursday with dressed deals sporting a range of $295 to $300, very few at the high end of this range, most were at $296, about $4 lower than the previous week's weighted average basis Nebraska. Note that some of these dressed cattle were set to be delivered as early as last Saturday. Live business in that same area had a range of $181 to $190, mostly $186, also $4 lower than the weighted averages the week before. Very light Southern sales held off until Friday and came in at $182, $3 lower than the prior week's weighted averages.
Boxed beef prices are lower: choice down $1.31 ($338.83) and select down $1.83 ($308.93) with a movement of 63 loads (31.08 loads of choice, 16.22 loads of select, 9.06 loads of trim and 6.17 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is trading lower despite the fact that corn prices are too trending lower. August feeders are down $1.75 at $233.17, September feeders are down $1.37 at $236.77 and October feeders are down $1.30 at $239.00. It's not helping feeders' position that the live cattle market is trading lower as well, but as traders enter the new week, they're skeptical as they want to continue to support the cattle market's bullish fundamentals, but they're also concerned about drought in the Corn Belt and high feed prices.
LEAN HOGS:
The lean hog complex is trading higher as pork cutout values and cash prices are helping boost trader morale. As traders etch higher and higher, and closer and closer to resistance levels, at this point, traders are showing no caution as they continue to drive prices higher. July lean hogs are up $1.82 at $94.67, August lean hogs are up $0.87 at $91.55 and October lean hogs are up $0.30 at $80.37. Pork cutout values could see some volatility in the near future as retail buying for the Fourth of July weekend is close to being done with.
The projected lean hog index for June 19 is up $0.54 at $88.75, and the actual index for June 16 is up $0.57 at $88.21. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.92 with a weighted average of $94.26, ranging from $80.00 to $96.00 on 3,204 head and a five-day rolling average of $93.59. Pork cutouts total 184.76 loads with 156.56 loads of pork cuts and 28.20 loads of trim. Pork cutout value: down $1.35, $94.71.
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