GENERAL COMMENTS:
The futures market traded on both sides of steady Tuesday, but ended up treating the lean hog and live cattle contracts favorably through closing. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.93 with a weighted average of $112.34 on 4,894 head. July corn is up 3/4 cent per bushel and July soybean meal is up $2.90. The Dow Jones Industrial Average is down 30.42 points and NASDAQ is up 43.19 points.
LIVE CATTLE:
Boxed beef prices squeaked through the day and closed mixed as opposed to fully lower, but once again, the cash cattle market disappoints as it continues to trade steady. Looking at the market and the weeks to come, the most concerning realization is that, when boxed beef prices do begin to trade fully lower, the cash cattle market doesn't have a leg to stand on. The countryside saw a fair movement of cattle in Nebraska, but a vast majority of the cattle sold with delivery for the week of June 21. Northern cattle sold dressed for $190 to $$191 and live for $120. There wasn't much trade to speak of in the South, but there were a handful of cattle that traded for $119 in Kansas. Knowing that packers have cattle committed for the weeks ahead, their aggression in the cash market will most likely continue to be lukewarm at best, as they simply buy a few here and there but not enough to relieve the market of front-end supplies. June live cattle closed $0.50 higher at $116.72, August live cattle closed $0.05 higher at $117.82 and October live cattle closed $0.22 higher at $0.123.92. Tuesday's cattle slaughter is estimated at 120,000 head, 26,000 head more than a week ago and 5,000 head more than a year ago. Monday's slaughter was revised to 115,000 head, which is 4,000 head less than what was originally stated.
Boxed beef prices closed mixed: choice up $0.01 ($338.61) and select down $2.99 ($306.18) with a movement of 108 loads (62.25 loads of choice, 27.84 loads of select, 9.06 loads of trim and 9.04 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to slightly lower. The North was able to see a moderate movement of cattle trade steady throughout Tuesday, but with boxed beef prices teetering, the market could be subject to lower trade.
FEEDER CATTLE:
The corn market's rally wasn't a big one, but any form of green trade puts the feeder cattle contracts in defense mode. The corn market's slightly higher trade cost the nearby contracts their ability to trade higher, but some of the deferred contracts traded confidently as the market could see higher prices with a dwindling cowherd. August feeders closed $0.95 lower at $149.25, September feeders closed $0.67 lower at $151.95 and October feeders closed $0.40 lower at $154.25. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to two weeks ago, feeder steers and heifers sold $3.00 to $5.00 higher. Steer calves sold $3.00 to $5.00 lower while heifer calves traded $2.00 to $4.00 higher. The CME Feeder Cattle Index for June 7: down $0.95, $140.12.
LEAN HOGS:
For the most part, the lean hog complex was able to swat away any negative connotations and closed mostly higher Tuesday. There were some nearby contracts that trade just mildly lower though closing, but for the most part, the market continues to thrive on thin supplies of market-ready hogs and the nation's hungry appetite. June lean hogs closed $0.80 higher at $120.70, July lean hogs closed $0.30 lower at $121.80 and August lean hogs closed $0.22 lower at $118.67. Pork cutouts total 378.67 loads with 340.14 loads of pork cuts and 38.53 loads of trim. Pork cutout values: up $0.21, $134.94. Tuesday's slaughter is estimated at 485,000 head, 95,000 head more than a week ago and 41,000 head more than a year ago. Monday's slaughter was revised to 478,000 head, which is 5,000 head less than what was originally stated. The CME Lean Hog Index for June 4: up $1.76, $116.51.
WEDNESDAY'S CASH HOG CALL: Steady. Packers weren't able to buy a large quantity of hogs through Tuesday's business, but they darn sure paid higher prices for them. With the availability of hogs favoring sellers, packers may have to pay more in order to keep processing speeds running at steady levels. Packers participation in the cash market really comes down to their need of hogs, but with prices as rewarding as they are, they want to process as many hogs as possible.
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