GENERAL COMMENTS:
It was a good day for the live cattle and lean hog contracts, as both markets saw aggressive processing speeds throughout Monday, and both pork and boxed beef prices closed higher. The feeder cattle complex couldn't look past the corn market's advancement and rounded out the day fully lower. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.17 with a weighted average of $101.64 on 3,013 head. July corn is up 28 1/4 cents per bushel and July soybean meal is up $4.30. The Dow Jones Industrial Average is up 26.76 points.
LIVE CATTLE:
The live cattle market took advantage of Monday's supportive nature and rounded out the day fully higher. June live cattle closed $1.10 higher at $133.17, August live cattle closed $1.55 higher at $133.90 and October live cattle closed $0.72 higher at $139.85. The live cattle market was that boxed beef prices closed higher and Monday's slaughter was ambitious at 124,000 head. Both key factors help support the market and could help traders feel confident about supporting the market again come Tuesday. The cash cattle market saw a few head of cattle trade in Iowa at $142, but there wasn't enough to say that any sort of trend was established for the week. Bids and asking prices are both elusive at this point and if the futures market continues to trade higher, packers could wait until Wednesday or later to offer up bids.
Monday's slaughter is estimated at 124,000 head, 3,000 head more than a week ago and 10,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 90,683 head. Of that 73% (66,368 head) were committed for the nearby delivery, and the remaining 27% (24,315 head) were committee for the deferred delivery.
Boxed beef prices closed higher: choice up $1.36 ($260.31) and select up $1.77 ($245.67) with a movement of 95 loads (45.02 loads of choice, 14.55 loads of select, 8.03 load of trim and 26.99 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. If boxed beef prices remain steady/firm throughout the week, then feedlots stand a chance at holding the market steady. If any of the market's key fundamental points weaken, then packers will likely pull the cash cattle market lower.
FEEDER CATTLE:
The saga of a high corn market and trembling, retreating feeder cattle market continued through Monday's trade and ultimately led to a lower close in the feeder cattle complex. August feeders closed $0.60 lower at $167.42, September feeders closed $0.62 lower at $170.05 and October feeders closed $0.62 at $172.42. While it was good to see the live cattle complex close higher, the feeder cattle market can't shake nor overlook a gain in the corn market as feed prices are already painfully high. At Oklahoma National Stockyards, at their midsession point and when compared to a week ago, feeder steers traded unevenly steady, but feeder heifers traded $3.00 to $5.00 lower. Steer and heifer calves traded $4.00 to $8.00 lower. Demand continues to be stronger for heavier weights, which take less time to feed. The market's reporter shared that more unweaned calves are beginning to show up and that the tone of the sale seems to be more like a June run than a May sale. The CME Feeder Cattle Index for May 13: unavailable at this time.
LEAN HOGS:
The lean hog complex ran higher throughout Monday's trade and rounded out the day with the same type of vigor and steam. June lean hogs closed $3.07 higher at $103.82, July lean hogs closed $3.60 higher at $104.80 and August lean hogs closed $3.35 higher at $104.80. Pork cutouts closed higher, cash prices closed higher, and Monday's slaughter was aggressive at 480,000 head -- all key factors that could help Tuesday's market push higher. Still, just because Monday's market closed higher doesn't mean that the market's tone has shook all of its concern. In order to have found a bottom, the market is going to need to see follow-through support, both technically and fundamentally, over the next week. Pork cutouts totaled 356.67 loads with 309.54 loads of pork cuts and 47.13 loads of trim. Pork cutout values: up $0.38, $101.55. Monday's slaughter is estimated at 480,000 head - 19,000 head more than a week ago and 7,000 head more than a year ago. The CME Lean Hog Index for May 12: up $0.45, $100.49.
TUESDAY'S CASH HOG CALL: Steady. Given that both pork cutout values and boxed beef prices closed higher, consumers could be getting ready for Memorial Day weekend and showing more interest in grilling-type meats.
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