GENERAL COMMENTS:
Lean hog futures led the livestock complex higher Monday with triple-digit gains seen in July through February 2024 contracts as August futures rallied $3.42 higher in active support. Firm buyer support in outside markets stimulated buyer support with corn prices surging higher while stock markets posted triple-digit gains in both the Dow Jones and Nasdaq. There remains uncertainty as to how much commercial follow-through support will develop through the rest of the week as traders closely monitor meat and cash price fundamental shifts over the next couple of days. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $7.72 with a weighted average price of $93.24 on 2,415 head. July corn is up 13 cents per bushel and July soybean meal is up $0.20. The Dow Jones Industrial Average is up 189.87 points.
LIVE CATTLE:
Buyers quickly stepped back into the live cattle complex Monday with August through June 2024 contracts closing with triple-digit gains. The fundamental support in both cash and boxed beef markets has quickly offset the selling pressure that developed last week. The underlying focus is on strong demand while active support in beef values is rekindling buyer support during early week trade. Active support in stock markets helped to ease overall fears Monday. This may help to bring additional price activity and volume to the livestock markets in general, but specifically nearby live cattle futures. Following last week's price pressure, fall and winter contracts remain technically rangebound, but there remains strong potential to break above last week's highs given the firming fundamental support in the beef market. June live cattle closed $0.85 higher at $179.07, August live cattle closed $1.35 higher at $173.20 and October live cattle closed $1.67 higher at $176.47.
Cash cattle activity remains quiet Monday, which is no surprise given the active underlying support seen last week. Showlists for the week appear to be mixed, higher in Kansas and somewhat higher in Nebraska/Colorado, while lower in Texas. The 5-areas weekly average last week moved to $188.75 per cwt. This is a $6.72 per cwt rally from the previous week. Accumulated weekly sales in Nebraska and Texas were higher than the previous week, although total reported Kansas sales dipped 3,350 head from the previous week's levels. It is expected that active trade may be delayed until midweek or later.
Monday's slaughter is estimated at 125,000 head, 4,000 head less than a week ago and 5,000 head less than year ago.
Boxed beef prices closed higher: choice up $4.50 ($337.43) and select up $4.53 ($310.24) with a movement of 80 loads (45.19 loads of choice, 17.8 loads of select, 8.68 loads of trim and 8.09 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to higher. The aggressive rally in cash cattle prices over the last two weeks is creating additional bullishness from feeders, although there is growing concern as to just how much more aggressiveness packers will show given the recent price hikes. This is likely to delay cash cattle trade activity to the last half of the week
FEEDER CATTLE:
Spillover support from buying, which swept through live cattle futures, offset a rally in corn markets Monday. Spot August feeder cattle futures were little changed, although moderate to firm support seen across the rest of the futures complex helped to steadily bring buyer support back to the table. This may help to spark additional buyer interest back into the market through the middle of June, although sharp losses last week may create some uncertainty from noncommercial traders in the near future. August feeders closed $0.05 higher at $239.05, September feeders closed $0.37 higher at $242.07 and October feeders closed $0.62 higher at $244.12. The Oklahoma City National Stockyards feeder cattle report posted total receipts of 10,750, which is 502 head above week ago levels and 2,829 head more than year ago levels. Compared to last week, steers, heifers and mostly heifer calves sold $4 to $6 per cwt lower, with overall quality listed as not as attractive. It appears that buyers are a little more selective in purchasing at this point wheat harvest is being delayed by rain in some areas. The CME Feeder Cattle Index for June 9: unavailable at this time.
LEAN HOGS:
The lean hog complex found additional buyer support Monday as traders returned to the market following the late-week rally that developed on Friday. The focus on moderate shifts in 2023 pork production levels, helped to rally nearby July contracts over $4 per cwt in the past two trading sessions. The renewed buyer support in the corn market could curb follow-through buyer interest through the week. July lean hogs closed $1.97 higher a $91.60, August lean hogs closed $3.42 higher at $87.37 and October lean hogs closed $2.62 higher at $78.00. Pork cutouts totaled 310.45 loads with 286.4 loads of pork cuts and 24.05 loads of trim. Pork cutout values: down $0.19, $88.20. Monday's slaughter is estimated at 467,000 head – steady with a week ago and 6,000 head more than a year ago. The CME Lean Hog Index for June 9: up $1.43, $84.73.
TUESDAY'S HOG CALL: Steady to Higher. Continued moderate to aggressive futures support in summer and fall lean hog contracts is expected to create additional focus on packers need to gain access to market-ready hogs over the next few days following growing support early in the week.
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