GENERAL COMMENTS:
It was another rallying day for both the live cattle and feeder cattle contracts as the corn market traipsed lower. Heading into Wednesday's trade, the market will feel more pressure as cash cattle trade is expected to begin. If the board is supportive, it's not out of the question for feedlots to get $1.00 or so higher. Meanwhile, the lean hog complex trended lower throughout Tuesday's market and with pork cutout values closing lower again, Wednesday isn't expected to be much better. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.57 with a weighted average of $100.13 on 5,816 head. July corn is down 10 1/2 cents per bushel and July soybean meal is down $7.00. The Dow Jones Industrial Average is up 67.29 points.
LIVE CATTLE:
It was a good day for the live cattle complex as traders supported the marketplace and cash seems to be holding out for higher money. June live cattle closed $0.12 higher at $135.32, August live cattle closed $0.27 higher at $137.32 and October live cattle closed $0.47 higher at $144.52. It was relieving to see that Tuesday's slaughter was back up to respectable levels after Monday's pitiful performance. A regional packer offered bids of $141 in Kansas Tuesday, but the feedlots were comfortable letting that bid sit and hoping that the later part of the week brings more. There was a little bit of trade that developed in the North but certainly not enough to say that any sort of a trend formed. It's likely that business kicks off Wednesday, and given the board's support, seeing $1.00 higher isn't out of the question either. Southern feedlots are asking $142 to $143, and the North has yet to disclose their asking prices.
Tuesday's slaughter is estimated at 126,000 head, 1,000 head more than week ago and 4,000 head more than a year ago. Monday's slaughter was revised to 111,000 head, 4,000 head less than what was originally stated.
Boxed beef prices closed lower: choice down $3.00 ($259.55) and select down $0.89 ($247.34) with a movement of 176 loads (93.81 loads of choice, 28.42 loads of select, 21.84 loads of trim and 32.21 loads of ground beef).
WEDNEDSAY'S CASH CATTLE CALL: Steady to $1.00 higher. The futures market has been rather supportive thus far for the cash cattle market to seek higher prices, but we know that packers are sitting on a plethora of cattle. It's not out of the question to see cattle trade higher, but feedlots are going to have to work for it.
FEEDER CATTLE:
With the corn market having waved its white flag ahead of Tuesday's close, the feeder cattle contracts were able to rally throughout the day's end and enjoyed getting to regain some of the ground that was lost last week. May feeders closed $0.97 higher at $162.40, August feeders closed $2.20 higher at $176.27 and September feeders closed $1.67 higher at $178.35. Timely rains have been an absolute godsend for cow-calf producers who are needing grass. If the corn market continues to trend lower, then feeders stand a strong chance at keeping their rally this week. At OKC West Livestock Auction in El Reno, Oklahoma, at their midsession point compared to last week, steer and heifer calves that were long-weaned and suitable for grazing were trading $2.00 to $4.00 higher. New crop calves that were short weaned were trading $3.00 to $5.00 lower. The CME Feeder Cattle Index for May 2: up $0.53, $155.77.
LEAN HOGS:
To answer Monday's question: No, the bottom hadn't been found yet. Both pork cutout values and the board trended lower throughout Tuesday's trade and painted a grim marketplace for hog enthusiasts. June lean hogs closed $2.77 lower at $102.20, July lean hogs closed $3.20 lower at $103.85 and August lean hogs closed $2.52 lower at $104.35. The cash market saw enough interest from packers to enable prices to trend higher, but that's likely not going to persuade the futures complex to change its current trajectory. Pork cutouts total 310.23 loads with 282.87 loads of pork cuts and 27.37 loads of trim. Pork cutout values: down $1.02, $105.56. Tuesday's slaughter is estimated at 480,000 head, steady with a week ago and 6,000 head less than a year ago. The CME Lean Hog Index for April 29: down $0.18, $101.59.
WEDNESDAY'S CASH HOG CALL: Steady. The packers who bought in Tuesday's cash market needed hogs, and with supplies of market-ready hogs still thin, even though the market is trending lower, cash sellers are still able to use the market's short supply to their favor. It's likely that Wednesday's market sees active participation from packers again, but I don't foresee a large volume trading.
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