GENERAL COMMENTS:
The cattle complex was able to add some position back into its market ahead of Monday's close, but the lean hog complex still closed fully lower. Consumer demand will greatly affect both the cattle and hog markets again this week. Hog prices are higher on the Daily Direct Afternoon Hog Report, up $2.45 with a weighted average price of $89.35 on 1,553 head. July corn is down 2 3/4 cents per bushel and July soybean meal is down $5.20. The Dow Jones Industrial Average is down 205.25 points.
LIVE CATTLE:
It was nerve-racking to watch the live cattle complex trade throughout the morning as the complex was testing new lows for the current trading range, but thankfully before Monday's end, traders saw the support in the boxed beef complex and pulled the contracts higher. June live cattle closed $0.47 higher at $182.02, August live cattle closed $0.42 higher at $178.87 and October live cattle closed $0.10 higher at $180.90. It will be vital to the futures complex's success that the market's fundamentals come in strong this week as cash cattle prices traded lower last week. Feedlots and packers will again go toe-to-toe this week, and it's anyone's guess on how cash prices will land. There's an argument to be made that if beef demand remains strong that packers will need to procure more cattle to ensure that they have enough beef to market, but there's also a strong argument in the fact that packers have been active in the cash market over the last month and have built up a considerable supply already. So much of the market's short-term direction will depend on consumer support. Monday's slaughter is estimated at 120,000 head -- incomparable to last week but steady with a year ago. New showlists appear to be mixed, higher in Kansas, but lower in Texas and Nebraska/Colorado.
Last week's negotiated cash cattle trade totaled 73,431 head. Of that 73% (53,578 head) were committed to the nearby delivery, while the remaining 27% (19,853 head) were committed to the deferred delivery. Last week Southern live cattle traded for mostly $186 which is $1.00 lower than the previous week's weighted average, and Northern dressed cattle traded for mostly $301 which is $3.00 lower than last week's weighted average.
Boxed beef prices closed higher: choice up $2.40 ($315.60) and select up $1.99 ($303.70) with a movement of 90 loads (52.34 loads of choice, 18.18 loads of select, zero loads of trim and 19.72 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to somewhat lower. Given that packers bought 73,000 head in last week's cash market and committed 73% of them to the nearby delivery likely means that they're going to try to hold up cash prices again this week.
FEEDER CATTLE:
The feeder cattle complex was able to move its deferred contracts slightly higher ahead of the day's close although the nearby contracts still closed slightly lower. Thankfully demand in the countryside is continuing to perform extremely well, which may lend the market some support later throughout the week. Next week Superior's Corn Belt Classic will be the first test of the online video auctions for the year and will also help producers forecast what they may be able to expect for their feeder cattle sales later this year. August feeders closed $0.20 lower at $256.20, September feeders closed $0.25 lower at $257.87 and October feeders closed $0.12 lower at $258.85. Today's lower close seemed to be more technically driven by the outside pressure of the market than an accurate representation of what the market is doing fundamentally. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to the last sale two weeks ago steers over 750 pounds sold steady to $3.00 higher but steers under 750 pounds sold $3.00 to $7.00 higher. Heifers over 650 pounds traded $1.00 to $3.00 lower, but heifers under 650 pounds sold $3.00 to $7.00 higher. Feeder cattle supply over 600 pounds was 71%. The CME feeder cattle index 5/31/2024: up $2.53, $250.77.
LEAN HOGS:
The lean hog complex attempted to trade higher earlier in the day, but the market ultimately ended up closing lower with the lack of pork demand being the market's current demise. Pork cutout values closed lower yet again, with every single cut seeing a lower price by the day's end. But the butt's $2.74 decline and the ham's $2.68 decline were the biggest drops for the day. June lean hogs closed $0.70 lower at $93.65, July lean hogs closed $0.85 lower at $96.27 and August lean hogs closed $0.87 lower at $95.62. Pork cutouts totaled 280.43 loads with 246.83 loads of pork cuts and 33.60 loads of trim. Pork cutout values: down $1.82, $101.43. Monday's slaughter is estimated at 483,000 head -- incomparable to last week but 19,000 head more than a year ago. The CME lean hog index 5/30/2024: up $0.49, $91.49.
TUESDAY'S HOG CALL: Steady. Packers showed more interest in the cash market than I expected given that it's only Monday, which could signal that they're short bought on hogs.
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