GENERAL COMMENTS:
It was a riveting day throughout the cattle complex as Friday's Cattle on Feed report gave the market the support it needed to allow the live cattle market to close above its resistance threshold.
Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.82 with a weighted average price of $90.31 on 689 head. May corn is up 6 1/4 cents per bushel and July soybean meal is up $1.60. The Dow Jones Industrial Average is up 253.58 points.
LIVE CATTLE:
It was a good day for the live cattle complex as the market gapped higher right from Monday's start and traded higher through the day's end. It was worth noting the spot June contract closed above the market's resistance at $175.50, signaling traders are confident about this move. The market's rekindled bullishness likely encourages feedlots to price cattle higher this week. It will be a tough conversation in trying to get packers to pay more for cattle as they've slowly built up supplies and reduced processing speeds to negate the cash cattle market from trading uncontrollably higher.
June live cattle closed $2.37 higher at $178.05, August live cattle closed $2.85 higher at $176.40 and October live cattle closed $3.20 higher at $179.95. New showlists appear to be mixed: higher in Texas but lower in Kansas and Nebraska/Colorado. Monday's slaughter is estimated at 113,000 head -- 8,000 head less than a week ago and 12,000 head less than a year ago.
Last week, Northern live cattle traded at $292 to $294 but mostly at $292, $1 lower than the previous week's weighted average. Southern live cattle traded at $180 to $183, but mostly at $182, steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 67,898 head. Of that, 83% (56,224 head) was committed to the nearby delivery and the remaining 17% (11,674 head) committed to the deferred delivery option.
Boxed beef prices closed higher: choice up $0.26 ($295.93) and select up $1.04 ($291.87) with a movement of 104 loads (68.00 loads of choice, 12.34 loads of select, zero loads of trim and 23.30 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Given that carcass weights are growing heavier and packers have reduced processing speeds, it's unlikely that cattle will trade much better than steady this week.
FEEDER CATTLE:
The feeder cattle complex had no issue closing higher Monday afternoon as the market was well supported throughout today's trade, thanks to the added support from Friday's Cattle on Feed report, showing March placements down 12% from a year ago. May feeder cattle closed $3.17 higher at $245.17, August feeders closed $4.97 higher at $258.47 and September feeders closed $4.95 higher at $259.37. The report's bullishness even supported feeder cattle sales in the countryside as higher tones were noted there, too. At Oklahoma National Stockyards in Oklahoma City, at their midsession point and when compared to last week, feeder steers and heifers were trading $4 to $8 higher. Feeder cattle supply over 600 pounds was 85%. The CME feeder cattle index April 19: up $0.38, $242.11.
LEAN HOGS:
The lean hog complex grew stronger as the day traded onward. It started with only the nearby lean hog contracts trading higher but by Monday's close, the entire marketplace saw higher gains. Contributing most to today's upward trend seemed to be the support of both processing speeds and strong pork cutout values. The afternoon carcass price closed to close higher and was comprehensively supported by the vast majority of cuts.
The belly closed $6.06 higher, the rib closed $4.21 higher and the picnic closed $3.35 higher. Pork cutouts totaled 234.38 loads with 204.68 loads of pork cuts and 29.70 loads of trim. Pork cutout values: up $1.61, $101.70. Monday's slaughter is estimated at 487,000 head -- 5,000 head more than a week ago and 20,000 head more than a year ago. The CME lean hog index April 18: down $0.11, $91.35.
TUESDAY'S HOG CALL: Higher. Given that pork cutout values are seeing ample support early this week, it's likely packers will show more interest in Tuesday's cash market.
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