Tuesday Closing Livestock Market Update - Strong Beef Demand Keeps Traders Excited to Support the Cattle Complex

GENERAL COMMENTS:

It was another good day for the cattle complex as traders are thrilled to see continued boxed beef demand, but the lean hog complex is struggling as its market isn't seeing the consumer demand it had hoped for. No cash cattle trade has developed yet, and trade will likely be delayed until Thursday or Friday. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.77 with a weighted average price of $88.20 on 5,703 head. July corn is down 2 1/2 cents per bushel and July soybean meal is down $1.80. The Dow Jones Industrial Average is up 66.22 points.

LIVE CATTLE:

The live cattle complex traded higher throughout Tuesday's market as demand is sufficient and traders are seeing more than enough fundamental support to justify advancing the futures contracts. June live cattle closed $1.50 higher at $182.97, August live cattle closed $1.87 higher at $180.42 and October live cattle closed $1.32 higher at $183.15. The cash cattle market will be interesting to watch this week as packers have bought a plethora of cattle over the last month, but in order to have enough meat to market to retailers in this hot market environment, they can't afford to be short bought. Asking prices in the South are noted at $188 to $190 but are not yet established in the North. 

Tuesday's slaughter is estimated at 122,000 head -- 1,000 head less than a week ago and 6,000 head less than a year ago.

Boxed beef prices closed higher: choice up $0.32 ($313.02) and select up $1.52 ($300.87) with a movement of 100 loads (60.93 loads of choice, 16.43 loads of select, 8.64 loads of trim and 13.76 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Higher. Given that demand is remaining strong, cash cattle prices could trade higher again this week.

FEEDER CATTLE:

With the support of a higher trading live cattle complex, higher boxed beef prices and weaker corn prices, it was an easy decision for the feeder cattle complex to trade higher throughout Tuesday's market. What's also been extremely supportive to the feeder cattle sector is the continued support of strong demand in the countryside. With breeding season upon most spring calving herds, there has been an uptick in prices for heifer calves that could be bred this spring. May feeders closed $2.15 higher at $248.95, August feeders closed $1.35 higher at $259.82 and September feeders closed $1.47 higher at $261.12. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week steers sold $3.00 to $6.00 higher and heifers sold $4.00 to $8.00 higher. Light weight heifers sold up to $12.00 higher. Feeder cattle supply over 600 pounds was 80%. The CME feeder cattle index 5/21/2024: not available at this time.

LEAN HOGS:

It was another day of lower-trending trade for the lean hog complex as pork demand continues to be lagging. But today's lower carcass price wasn't because of a steep fall in the belly, but instead mostly because of the $4.60 decline in the loin, although the picnic and belly both fell for more than a $1.00 lower as well. At this point, unless pork demand increases, the market's trend could be lower for the near future. June lean hogs closed $0.52 lower at $96.40, July lean hogs closed $0.62 lower at $99.32 and August lean hogs closed $0.62 lower at $98.57. Pork cutouts totaled 297.71 loads with 260.59 loads of pork cuts and 37.12 loads of trim. Pork cutout values: down $1.08, $100.69. Tuesday's slaughter is estimated at 480,000 head – steady with a week ago and 4,000 head more than a year ago. The CME lean hog index 5/17/2024: down $0.07, $92.22.

WEDNESDAY'S HOG CALL: Steady to somewhat higher. Packers were slightly more aggressive in Tuesday's market, but will likely still need to procure more hogs in Wednesday's market. 

Tuesday Midday Livestock Market Summary - Cattle Trade Higher as Boxed Beef Prices Remain Supported

GENERAL COMMENTS:

Heading into Tuesday afternoon, the livestock complex is mixed with the cattle sector receiving ample support but the lean hog contracts continuing to trade lower as demand remains an issue. No cash cattle trade has developed and it's likely trade will be delayed until Thursday or Friday again this week. July corn is down 4 1/4 cents per bushel and July soybean meal is down $4.20. The Dow Jones Industrial Average is up 19.52 points.

LIVE CATTLE:

With midday boxed beef prices higher and corn prices lower near noon, the live cattle complex has sprung back to trading fully higher as the market is seeing ample support. So long as beef demand remains steady or (even better yet for the cattle market) higher, then traders should be able to confidently advance the board with little trouble. It's yet to be seen what this week's cash cattle market will do and it's likely trade will be delayed until late in the week. A case can be made that packers will need to remain aggressive in the cash sector as they can't afford to be too short on supplies to market to retailers when beef prices are strong. But there's also a chance packers have bought aggressively enough in the last four weeks to be able to forgo having to robustly support this week's cash market. Honestly, time will tell, and demand is going to be a large deciding factor of this week's cash cattle trade. June live cattle are up $1.70 at $183.17, August live cattle are up $1.80 at $180.32 and October live cattle are up $1.30 at $183.10.

Boxed beef prices are higher: choice up $1.17 ($313.87) and select up $2.68 ($302.03) with a movement of 56 loads (35.26 loads of choice, 8.79 loads of select, zero loads of trim and 11.70 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is back to trading lower as the market has seen stable support in boxed beef prices and it is encouraged that Tuesday's corn prices are trending lower as well. It's also helpful that traders don't have to immediately decide if they want to take on the market's resistance at its 100-day moving average. If traders continue to trade the complex steady to slightly higher, taking on the market's 100-day moving average will be a decision for another day. May feeders are up $1.75 at $248.45, August feeders are up $1.02 at $259.50 and September feeders are up $1.15 at $260.80.

LEAN HOGS:

It's a dreary day for the lean hog complex as the market is mostly lower. Some of the furthest deferred contracts are trading mildly higher, but the lion's share of the market is continuing to trade lower. With midday pork cutout values lower, traders are speculating that afternoon pork cutout values could be lower too. June lean hogs are down $0.65 at $96.27, July lean hogs are down $0.85 at $99.10 and August lean hogs are down $0.87 at $98.32.

The projected CME Lean Hog Index for 5/20/2024 is down $0.21 at $92.01 and the actual index for 5/17/2024 is down $0.07 at $92.22. Hog prices on the Daily Direct Morning Hog Report average $88.49, ranging from $84.50 to $90.00 on 1,248 head and a five-day rolling average of $88.90. Pork cutouts total 172.75 loads with 151.56 loads of pork cuts and 21.19 loads of trim. Pork cutout values: down $0.99, $100.87.

Tuesday Morning Livestock Market Update - Higher Cash Hog Prices Expected

GENERAL COMMENTS:

Traders were unsure of the strength of cash this week as it may be difficult to see a repeat of last week. The strong demand ahead of the Memorial Day weekend may have run its course as boxed beef prices were mixed Monday with choice down $0.75 and select up $1.95. This may be the pattern for the week. Cattle futures made new highs but could not hold onto those highs before falling back. Four days of higher highs and higher lows may give more confidence to traders to remain aggressive buyers. Both live and feeder cattle came under pressure as grain futures increased. It has been some time since this has impacted cattle futures as grain futures have not been as focused on by cattle traders in a while. The Cattle on Feed report will be released Friday, but it is too early for traders to position for the report.

Hog futures continue to have a difficult time finding solid support. The uncertainty of cash during much of Monday kept traders cautious and strength unable to be maintained. The National Direct Afternoon Hog report showed packers were not aggressive with a decline of $2.44. Cash is expected to be higher Tuesday as weekend demand has been assessed and Memorial Day demand needs to be satisfied. The continued strong slaughter pace needs to be met. Cutout values were higher with a gain of $0.92.

	BULL SIDE		BEAR SIDE
1)	Steady or higher cash cattle will support the market and keep the uptrend alive. June live cattle futures hold a discount to cash.	1)	The upcoming Cattle on Feed report and the holiday weekend may keep futures trading sideways for much of the week.
2)	Cattle numbers remain tight and that will not change for a while. Good demand should keep a higher slaughter pace.	2)	Beef demand may slow as buying for Memorial Day may have run its course. Boxed beef prices may show weakness.
3)	The packers continue to run a heavier slaughter pace even with higher weights. This indicates pork demand is strong.	3)	New lows in hog futures again Monday indicate support remains elusive. Traders see little reason for upside strength.
4)	Hog futures are oversold with traders likely to cover short positions before the holiday weekend.	4)	Packers maintain a strong slaughter pace to meet demand and continue to find a sufficient supply of hogs without being aggressive.

Monday Closing Livestock Market Update - Higher Corn Prices Grab the Cattle Market's Attention

GENERAL COMMENTS:

Higher corn prices kept the cattle contracts from rallying unbridled throughout Monday's trade, but if the market's fundamentals shine like they did last week -- higher trade will likely be in play for the later part of the week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.14 with a weighted average price of $86.43 on 2,002 head. July corn is up 8 cents per bushel and July soybean meal is up $5.30. The Dow Jones Industrial Average is down 196.82 points.

LIVE CATTLE:

With corn prices trading higher and it being early in the week, traders elected to mildly support the live cattle complex ahead of the day's close, although the August and October 2024 contracts closed slightly lower. The day's slight softness in some of the nearby contracts likely stems from the unknowingness of whether or not cash cattle prices will trade higher again this week, and how boxed beef prices will fair. If traders are going to continue to advance the nearby contracts, they're going to need unwavering fundamental support as the contracts are already breaking out into higher territory as opposed to trading in the comfortable sideways norm. June live cattle closed $0.42 higher at $181.47, August live cattle closed $0.50 lower at $178.55 and October live cattle closed $0.12 lower at $181.82. New showlists appear to be mixed, higher in Kansas, somewhat lower in Nebraska, and lower in Texas. Monday's slaughter is estimated at 120,000 head -- 4,000 head more than a week ago and 5,000 head less than a year ago.

Throughout last week Southern live cattle traded at $186 which is $2.00 higher than the previous week's weighted average and Northern dressed cattle traded at $300 which is $5.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 93,719 head. Of that 67%, (62,841 head) were committed to the nearby delivery, while the remaining 33% (30,878 head) were committed to the deferred delivery.

Boxed beef prices closed mixed: choice down $0.75 ($312.70) and select up $1.95 ($299.35) with a movement of 117 loads (58.83 loads of choice, 21.68 loads of select, 21.07 loads of trim and 15.62 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady to somewhat higher. Yes, packers have bought ample cash cattle supplies in recent weeks, but if they're going to supply consumers with meat they're going to need to keep processing cattle.

FEEDER CATTLE:

With the corn complex closing $0.07 to $0.08 higher the feeder cattle complex wasn't able to take on its market's resistance at the 100-day moving average as it seemed too early in the week to do so without more support having developed. Sales in the countryside continued to rally, however, on strong demand as buyers see boxed beef demand and the cash market's $2.00 to $5.00 rally last week as more than enough support to justify higher business. The complex may trade higher later in the week if the market's fundamentals remain strong, but from a technical standpoint traders felt more comfortable holding the market steady through today's trade. May feeders closed $0.02 lower at $246.70, August feeders closed $1.37 lower at $258.47 and September feeders closed $1.20 lower at $259.65. At Joplin Regional Stockyards in Carthage, Missouri compared to last week and at their midsession point, feeder steers were selling for $4.00 lower to $10.00 higher while heifers were selling $6.00 to $12.00 higher. Feeder cattle supply over 600 pounds was 60%. The CME feeder cattle index 5/17/2024: up $0.71, $243.04.

LEAN HOGS:

The lean hog complex rounded out the day on a stronger note as traders were encouraged by slightly higher pork cutout values, and by the day's substantial movement of 327.04 loads. June lean hogs closed $0.42 higher at $96.92, July lean hogs closed $0.10 lower at $99.95 and August lean hogs closed $0.27 lower at $99.20. The bigger movement of pork cuts could be sales ahead of the Memorial Day weekend and prime grilling conditions, and it could also be because retailers are concerned that beef is getting too expensive for some consumers who may choose to look at pork instead. Pork cutouts totaled 327.04 loads with 284.26 loads of pork cuts and 42.78 loads of trim. Pork cutout values: up $0.92, $101.77. Monday's slaughter is estimated at 482,000 head -- 21,000 head more than a week ago and 10,000 head more than a year ago. The CME lean hog index May 15/2024: up $0.37, $92.13.

TUESDAY'S HOG CALL: Higher. With pork cutout values closing slightly higher, packers may be slightly more interested in participating in Tuesday's cash market.