Tuesday Midday Livestock Market Summary - Light Trade Begins to Develop in the South

GENERAL COMMENTS:

The cattle contracts are trading lower as traders react to the onset of cheaper cash cattle prices already this week. It's sickening to me that cash cattle prices are beginning to trade lower already this week as the market's fundamentals continue to point to higher prices, but feedlot managers have seemed to forget that they have to seek those prices if they wish to receive them. July corn is up 2 cents per bushel and July soybean meal is down $4.30. The Dow Jones Industrial Average is down 553.52 points.

LIVE CATTLE:

I wish it weren't true, and it makes me nauseous to even type these words, but some cash cattle trade has begun to develop in the South. A light movement of cattle has been noted in parts of Texas and Kansas as packers continue to gain more control in the spot cash cattle market. Trade has begun to develop at $172, which is again $1.00 lower than last week's weighted average. And to follow that bad news, traders are reacting to the onset of this early, weaker trade and are consequently driving the live cattle contracts mostly $1.00 lower. June live cattle are down $1.60 at $163.27, August live cattle are down $1.52 at $161.12 and October live cattle are down $1.42 at $165.55. The North has yet to trade any cattle, but given that packers have been able to get feedlot managers in the South to trade them cattle already, Northern feedlots are going to have their work cutout for them as they try to keep prices at least steady for dressed cattle.

Boxed beef prices are mixed: choice down $1.20 ($308.82) and select up $1.77 ($292.77) with a movement of 57 loads (41.02 loads of choice, 5.93 loads of select, 3.67 loads of trim and 6.42 loads of ground beef).

FEEDER CATTLE:

With a weaker tone stemming from both the live cattle and cash cattle markets, and added pressures from the nearby corn contracts, it comes as no surprise that the feeder cattle contracts are trading mostly $2.00 lower. May feeders are down $2.32 at $207.37, August feeders are down $2.35 at $227.75 and September feeders are down $2.30 at $230.77. Unfortunately, with the increased weakness from the live cattle/cash cattle markets, at this point the feeder cattle complex stands little to no chance of closing higher.

LEAN HOGS:

The lean hog contracts are trading mildly lower into Tuesday's noon hour as traders are still waiting to see what Tuesday's demand shapes up to be. Midday pork cutout values are higher, which bodes well for the market, but packers haven't been nearly as aggressive in the cash market this morning. June lean hogs are down $).32 at $89.37, July lean hogs are down $0.47 at $90.77 and August lean hogs are down $0.57 at $92.07. If the market can see a slightly higher close in the afternoon pork cutout values, then Wednesday's market may be able to justify trading the contracts higher yet again.

The projected lean hog index for May 1 is up $0.92 at $73.02, and the actual index for April 28 is up $0.61 at $72.10. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.35 with a weighted average price of $70.13, ranging from $69.00 to $73.00 on 3,410 head and a five-day rolling average of $69.90. Pork cutouts total 171.87 loads with 156.29 loads of pork cuts and 15.57 loads of trim. Pork cutout values: up $1.44, $81.91.