GENERAL COMMENTS:
June live cattle gained back $1.27 of last week's $8.20 drop, a modest start to try to turn things around after getting help from Monday's higher boxed beef prices. May feeder cattle finished lower and June hogs were slightly higher after trading lower most of the day.
LIVE CATTLE:
June live cattle closed up $1.27 at $173.32 Monday, getting a boost after Monday's higher boxed beef prices following last week's poor performance. Choice boxed beef prices were down $9.55 last week, but rebounded Monday, finishing up $4.90 at $302.07. Selects were up $5.57 Monday at $300.27 with 77 total loads. It is possible that consumers aren't as discouraged from eating beef as retailers feared last week. It is also helping cattle prices that there has been no new bearish news since last Monday. Last week's cattle slaughter was estimated by USDA at 609,000, a decent level at a time when it is important to keep supplies moving. After Monday's close, USDA estimated daily slaughter at 121,000, up from 109,000 last week and a good sign of demand for cattle.
We knew last week's cash trade was lower, but Monday's weighted averages weren't too bad, considering the lower closes on the futures board. June live cattle fell $8.20 last week, but live steers in the five-state area were down $2.50 to $185.73. Negotiated volume totaled 79,999 and 77% of it was for current delivery. Negotiated prices suffered the most last week, falling $4.85 below formula. Overall, last week's cash trade suggests beef demand remains supportive for cash prices, while specs are more panicked. Friday's CFTC data showed noncommercial net longs dropped from 66,910 to 60,056 as of April 2.
With U.S. cattle and calf inventory at a historically low level, the bullish cattle market remains trapped by bearish bird flu concerns that may take time to overcome.
TUESDAY'S CATTLE CALL: Steady with a little more optimism after Monday's higher trade.
FEEDER CATTLE:
May feeder cattle briefly tried to trade higher early Monday, but finished down $1.45 at $236.72, another new two-month low. Speculative selling is likely behind most of the bearish pressure, but Friday's CFTC report showed noncommercials in feeders increased net longs from 1,674 to 2,505 as of last Tuesday, April 2. The cash side of feeder prices has been holding firmer. On Monday afternoon, the CME Feeder Index was quoted at $248.62 for Friday, up 95 cents from a week ago and well above Friday's April close at $237.70.
To sum up the situation, older dairy cattle in six states have been confirmed sick with highly pathogenic avian influenza. There has been no risk to the nation's milk or beef supply and so far, no beef cattle have been infected. Finding avian influenza among younger cattle is highly unlikely and, even if there were cases, authorities know of no risk for eating properly cooked beef. Technically speaking, Monday's new two-month low in May feeder prices remains bearish and shows how uncomfortable traders are on the long side of the futures market.
LEAN HOGS:
After climbing $6.45 last week to a new one-year high of 107.90, June lean hogs ended up $0.02 at $107.92, another new one-year high, supported by a $2.58 gain in pork cutouts. Cutouts ended Monday at $100.33, the highest value since August 2023 with help from an $11.40 jump in the price of bellies.
USDA's afternoon report of negotiated national cash hog prices ended at $86.32 Monday, still near its highest level since August 2023. USDA's swine formula price ended at $86.47, also near its highest price since August 2023. Both cash prices have seen significant gains in 2024 and are receiving much better interest from packers these days.
Late Friday, USDA estimated year-to-date hog slaughter up 0.6% from a year ago. Monday's slaughter was estimated at 472,000, up from 358,000 a week ago and a good sign of hog movement after Easter. The CME Hog Index was projected at $87.05 as of Friday, up $2.27 on the week, but below Friday's April futures price of 89.32.
TUESDAY'S HOG CALL: Steady in June hogs with traders leery about prices near new one-year highs.
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