GENERAL COMMENTS:
The livestock complex closed lower as traders weren't overly eager to support the livestock sector. However, seeing the rally in the corn market, traders withdrew from the sector. The most interesting development today was the higher close in boxed beef prices.
Hog prices are higher on the Daily Direct Afternoon Hog Report, up $3.03 with a weighted average price of $92.41 on 839 head. July corn is up 8 3/4 cents per bushel and July soybean meal is up $15.40. The Dow Jones Industrial Average is up 176.59 points.
LIVE CATTLE:
The futures complex may have closed lower, but what's on everyone's mind at the end today is the surprising performance seen in the boxed beef sector. Movement didn't amount to much as only 78 loads were noted, but the $4.56 jump in choice cuts is a market and hopefully, a promising sign that seasonal beef demand is improving.
The futures complex traded lackluster as the corn market's higher note left the entire cattle complex stalemated. June live cattle closed $0.30 higher at $176.97, August live cattle closed $0.15 lower at $174.42 and October live cattle closed $0.17 lower at $177.87.
New showlists appear to be mixed: higher in Texas, lower in Nebraska/Colorado, and sharply lower in Kansas. If boxed beef prices trend higher throughout the week, the cash cattle market could potentially see feedlot managers aiming to trade cattle higher again this week. Monday's slaughter is estimated at 120,000 head -- 7,000 head more than a week ago and 4,000 head less than a year ago.
Last week Northern dressed cattle traded for mostly $295 which is $1 higher than the previous week's weighted average. Southern live cattle waited to trade until Friday, but the wait was worth it as most live cattle in the South traded for $184, $2 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 92,693 head. Of that, 63% (58,165 head) were committed to the nearby delivery, while the remaining 37% (34,528 head) were committed to the deferred delivery.
Boxed beef prices closed higher: choice up $4.56 ($298.76) and select up $2.10 ($289.75) with a movement of 78 loads (47.46 loads of choice, 15.61 loads of select, zero loads of trim and 14.61 loads of ground beef).
TUESDAY'S CATTLE CALL: Higher. I believe feedlots will again price cattle higher, and depending on how short-bought packers are, they could end up paying more for cattle again this week as they're running faster chain speeds. On the other hand, with packers buying aggressively over the last two weeks, they may have secured enough cattle so they don't chase this week's cash market as aggressively.
FEEDER CATTLE:
The feeder cattle complex wasn't able to accomplish much today as the corn market's $0.07 to $0.10 rally grabbed traders' attention and shook any support the market had far away. May feeders closed $1.90 lower at $241.40, August feeders closed $1.87 lower at $252.87 and September feeders closed $1.90 lower at $253.87. Boxed beef prices were noticeably higher which could help encourage the cattle market, but corn prices will need to trade steady/somewhat lower before feeders trade higher again.
At Oklahoma National Stockyards in Oklahoma City, compared to last week and at their midsession point, feeder steers were trading steady to $3 lower and feeder heifers were trading unevenly steady. There was only a light test done on steer and heifer calves but a lower undertone was noted. Feeder cattle supply over 600 pounds was 85%. The CME feeder cattle index May 3: down $0.98, $242.39.
LEAN HOGS:
Hog prices weren't able to grow stronger ahead of the day's close even though afternoon pork cutout values did close higher. June lean hogs closed $0.77 lower at $98.17, July lean hogs closed $0.70 lower at $102.15 and August lean hogs closed $0.52 lower at $101.20. It was helpful for the afternoon's carcass price that the belly closed $4.01 higher, the loin closed $3.82 higher and the rib closed $1.74 higher.
If the market continues to see steady demand this week, traders may the complex higher, especially if the week's export report is supportive and Friday's WASDE report is promising in terms of demand over the summer.
Pork cutouts total 305.37 loads with 259.60 loads of pork cuts and 45.77 loads of trim. Pork cutout values: up $1.38, $99.50. Monday's slaughter is estimated at 481,000 head -- 5,000 head more than a week ago and 15,000 head more than a year ago. The CME lean hog index May 2: up $0.04, $90.96.
TUESDAY'S HOG CALL: Steady/somewhat lower. Given that Monday's market saw little to no trade as only 839 head traded in the cash market, Tuesday's market will likely see a bigger volume traded but prices may be steady to somewhat lower.
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