GENERAL COMMENTS:
The lean hog market had another stellar day with slaughter levels scaling higher, pork cutouts closing higher and the board supporting the market's fundamental movement. But the same, sadly, can't be said for the live cattle market -- boxed beef prices continue to rally, but packers continue to hold the cash market at steady levels. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.89 with a weighted average of $107.42 on 7,324 head. July corn is down 37 cents per bushel, and July soybean meal is down $13.90. The Dow Jones Industrial Average is down 81.52 points, and the NASDAQ is down 3.99 points.
LIVE CATTLE:
Frustrations continue to grow in the cash cattle market. Why in the world, following a week where 669,000 head of cattle were processed and both choice and select cuts are trading well above $3 per pound, are cash cattle selling on a Tuesday for steady to lower prices?! It's utter madness, and unfortunately, packers have won this week's battle already. There was a light to moderate trade that took place in the South with live deals trading for $120 (which is roughly $1 lower than last week), and Northern cattle sold for $191 (which is mostly steady with last week's trade). One may be inclined to think that because this week's slaughter is going to be less than last week's that packers don't "need" cattle. But given the high profits they can make on meat cuts right now, they want cattle, they need cattle and they are hungry to get paid as boxed beef prices are unfathomable.
June live cattle closed $0.02 lower at $116.72, August live cattle closed steady at $120.10 and October live cattle closed $0.25 higher at $124.52. Tuesday's slaughter is estimated at 121,000 head -- 1,000 head more than a week ago. Monday's slaughter was revised to 116,000 head -- 3,000 head fewer than what was originally stated.
Boxed beef prices closed higher: choice up $2.09 ($329.92) and select up $0.87 ($304.26) with a movement of 93 loads (45.27 loads of choice, 17.09 loads of select, 18.45 loads of trim and 12.22 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Seeing that packers have been able to pull cattle out of the North and the South already this week, the market's prices are largely set.
FEEDER CATTLE:
I've said it once, so what's wrong with saying it one more time when the market continues to beat to the same drum? High corn prices aren't necessarily a bad thing, but high corn prices amid sorry cattle prices is a colossal problem. The sharp rise seen in the corn market throughout Tuesday's trade came as a rallying opportunity for the feeder cattle contracts, and they didn't bat an eye about scaling higher. August feeders closed $2.55 higher at $156.67, September feeders closed $2.52 higher at $157.92 and October feeders closed $2.47 higher at $158.80. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold $1 to $4 higher, and feeder heifers sold $4 to $6 higher. Wherever the countryside has recently gotten rain, buyers have been more aggressive in their feeder cattle purchases as they are hopeful that grass will come on. The CME feeder cattle index 5/24/2021: up $0.65, $136.31.
LEAN HOGS:
After Tuesday's close, the lean hog market is sitting in a fine position to keep rallying so long as fundamental support continues. And with consumers eager to enjoy summer and market-ready supplies tight -- a higher trend is very likely. Pork cutout values closed higher (check); even though cash prices were lower, it was on a sizable movement (check); and Tuesday's slaughter is marked way up into the 480,000 head mark (check)! June lean hogs closed $1.90 higher at $115.25, July lean hogs closed $2.17 higher at $117.50 and August lean hogs closed $2.10 higher at $113.65. Pork cutouts total 336.52 loads with 312.23 loads of pork cuts and 24.29 loads of trim. Pork cutout values: up $2.31, $124.52. Tuesday's slaughter is estimated at 485,000 head -- 19,000 head more than a week ago. The CME lean hog index 5/21/2021: up $0.38, $111.81.
WEDNESDAY'S CASH HOG CALL: Steady. Demand is strong and slaughter speeds are kicking it up a notch, which all points to a higher cash hog market. But the big kicker of this deal is this: How many hogs are available and still coming down from Canada and negatively pulling on the cash hog market?
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