Wednesday Midday Livestock Market Summary - Continuing to Rally Support

General Comments

Heading into Wednesday's noon hour the livestock complex continues to press full-steam ahead and trade higher in all three contracts. The market has seems to be thriving coming back to the week with energy and optimism.

July corn is up 3/4 cent per bushel and July soybean meal is down $1.40. The Dow Jones Industrial Average is up 253.49 points and NASDAQ is down 70.36 points.

LIVE CATTLE

It's been a while in the making but Wednesday morning nearby live cattle contracts were finally able to break past the $100 resistance and trade higher throughout the entire marketplace. June live cattle are up $1.47 at $100.82, August live cattle are up $1.35 at $100.60 and October live cattle are up $1.20 at $102.82. The cash cattle market continues to trade mostly steady with last week's trade and some light trade has developed in nearly every feeding region. Southern live cattle are trading at $120 live and dressed cattle in the North are selling for $190. Asking prices are around $120 to $125, and dressed cattle are priced at $190 to $195.

The Fed Cattle Exchange Auction listed a total of 1,164 head, four lots in Texas, totaling 801 head, and three lots in Kansas, totaling 363 head. No cattle actually sold. Asking prices ranged from $115 to $120. All were set for one-to-17-day delivery.

Boxed beef prices are lower: choice down $5.92 ($379.57) and select down $7.11 ($352.91) with a movement of 102 loads (56.65 loads of choice, 12.18 loads of select, 7.18 loads of trim and 25.88 loads of ground beef).

FEEDER CATTLE

Heading into the second day of the week and the second day of a notable rally for the feeder cattle contracts. August feeders are up $1.12 at $134.42, September feeders are up $0.90 at $135.32 and October feeders are up $0.82 at $136.15. If the feeder cattle contracts continue to rally the market will face some looming resistance around $140, though the market has to gain $4.00 to $6.00 before it has to worry about that. Thankfully this uptick in prices is at the perfect time for sale barns as prices seem to be gaining slowly but surely throughout the countryside.

LEAN HOGS

Hog prices are rallying modestly, and their slow progression seems to bring a sense of assurance into the marketplace. June lean hogs are up $0.25 at $60.75, July lean hogs are up $0.27 at $59.85 and August lean hogs are up $0.92 at $58.07. cattle contracts may be rallying at somewhat of a stronger pace, but the nearby lean hog contracts have been able to rally over the last five trading days recovering a fair bid of position in the contracts.

The projected lean hog index for 5/25/2020 is up $0.23 at $62.53 and the actual index for 5/22/2020 is down $1.15 at $62.30. Hog prices aren't available on the National Direct Morning Hog Report due to confidentiality. Pork cutouts total 249.09 loads with 225.27 loads of pork cuts and 24.09 loads of trim. Pork cutout values: down $6.16, $91.28.

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Wednesday Morning Livestock Market Summary - Livestock Trade Building on Post-Holiday Futures Support

General Comments:

Cash cattle activity remains generally sluggish going into midweek with light trade developing in several areas Tuesday. Asking prices are expected to remain around $120 per cwt live basis and $200 dressed, but the overall movement in the cash cattle trade focused on wide trading ranges with some cattle trade hitting the top of last week's cash market prices. A market trend cannot be established by the movement of cattle Tuesday, but it does give an indication of the variability likely to continue through the market. Live cattle are reported sold from $110 to $120 per cwt, while dressed cattle ranged from $174 to $190 per cwt. The variability of cash prices over the last month has limited negotiated trade for the week due to extremely wide price swings. Given the limited packer capacity and continued backlog of cattle in feedlots, there seems to be little negotiation as there are only limited spots to be filled and feeders have the option to take them or packers will move on to other willing sellers. This could keep prices variable within wide trade ranges over the near future. Futures trade is expected to focus on the early week support as longer-term supply tightness is expected following the recent pullback in feeder cattle supplies to feedlots. The limit gains in feeder cattle Tuesday is likely to renew buyer support midweek, while lending additional support to live cattle futures. Wednesday slaughter is expected at 105,000 head.

Strong triple-digit gains during the last half of the trading session Tuesday sparked renewed underlying support through the complex. Although these price moves do little to change technical market direction due to the wide sideways market gaps in lean hog futures, the strong rally did move June futures above $60 per cwt for the first time in over two weeks. This threshold will be closely watched as July futures are nearing that level midweek following near limit gains in July trade on Tuesday. Little has changed fundamentally either in the lean hog complex, although the general perception that the worst may be behind us both in the hog industry and general economic downturn, could quickly spark renewed buyer support that has been hovering on the sidelines waiting for a green light to return to business as usual. Cash hog bids are expected $1 lower to $1 per cwt higher with most bids steady to firm. Slaughter Wednesday is expected at 407,000 head.

	BULL SIDE		BEAR SIDE
1)	Limit gains in August feeder cattle futures Tuesday will spark access to expanded trading limits of $6.75 per cwt in all feeder cattle contracts. The significant reductions in placements in April, combined with lower placements through the year is putting more emphasis on future feeder cattle buying in order to restock the feedlot system through the end of the year.	1)	Double-digit losses developed once again in beef cutout values Tuesday as prices seem to be returning to a more realistic level over the last couple of weeks. Traditionally, beef market losses following the Memorial Day weekend is not a good sign for overall beef demand, but normal benchmarks seem to have limited usefulness at this point.
2)	Higher cash cattle prices last week with an average of $117.06 per cwt posted a gain of $4.75 from the previous week. This upward shift in the market is sparking renewed expectations of additional cash market support given that packers seem to be reluctant to reduce cash prices given the Department of Justice eyes closely watching every move done in the meat industry.	2)	There remains little connection between the cattle and beef markets as markets attempt to slowly recover during late May and early June. Futures, cash and wholesale beef values are not holding typical trading relationships, creating little confidence in the support of recent futures gains at this point.
3)	Firm gains in pork cutout values Tuesday is pointing to price stability as packers continue to focus on filling consumer demand through early summer months.	3)	Cash hog values have weakened during early week trade. The still enormous backlog of market-ready hogs available to packers is limiting the need to shift prices higher, especially following the long holiday weekend and short production week.
4)	Steady gains are seen in daily slaughter numbers. This is creating the expectation that further growth will be seen as more plant workers return.	4)	Despite the strong triple-digit gains early in the week, lean hog futures are deeply entrenched within a sideways market trend, with two to three days of strong triple-digit gains still needed to break through resistance levels. This could limit the upside market direction the next couple of weeks.

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Tuesday Closing Livestock Market Summary - Livestock Contracts Higher

GENERAL COMMENTS:

All three livestock contracts rallied through closing, ending the day substantially higher for the start of the week. Boxed beef values and pork cutouts are trying to wade through this new era as prices start to correct and slaughter continues to grow. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.98 with a weighted average of $36.83 on 6,853 head sold. July corn is up 1 cent per bushel and July soybean meal is down $0.20. The Dow Jones Industrial Average is up 529.95 points and NASDAQ is up 15.63 points.

LIVE CATTLE:

Live cattle contracts closed higher and moved the market closer to that $100 resistance plane in nearby contracts. June live cattle closed $1.70 higher at $99.40, August live cattle closed $1.92 higher at $99.25 and October live cattle closed $2.22 higher at $101.62. Wednesday will be interesting, as the trade will fight immense resistance if the market chooses to rally and build upon what Tuesday established. Cash cattle trade, oddly enough, developed Tuesday despite it being the first trading day of the week. Cattle in Iowa sold dressed for $174 to $190, dressed cattle in Nebraska sold for $180 to $190 and live cattle sales in Kansas sold anywhere from $1.10 to $1.20. Tuesday's slaughter is estimated at 106,000 head, 7,000 head more than a week ago and 16,000 head less than a year ago.

The USDA National Weekly Direct Slaughter Cattle -- Negotiated Purchases report shared that last week packers bought 83,504 head; 79,411 were bought for delivery in the next two weeks while the remaining 4,093 head were bought for delivery in 15 to 30 days.

Boxed beef prices close lower: choice down $11.25 ($385.49) and select down $14.16 ($360.02) with a movement of 222 loads (136.84 loads of choice cuts, 28.85 loads of select, 15.82 loads of trim and 40.80 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Seeing that the market has already been tested, trade will most likely stay within the parameters set.

FEEDER CATTLE:

Feeder cattle contracts rallied all throughout the day and closed substantially higher, $3.00 to $4.50 higher throughout the complex. August feeders closed limit higher at $133.30, September feeders closed $4.27 higher at $134.42 and October feeders closed $4.07 higher at $135.32. The day's closing jumped over the 40-day moving average ($120.81) and the 100-day moving average ($129.37). At Blue Grass Stockyards in Lexington, Kentucky, compared to last week, feeder steers under 700 pounds sold $3.00 to $5.00 higher with good demand for weaned cattle. Feeder heifers sold steady to $2.00 higher with stronger demand again for cattle that had been weaned for some time. Slaughter cows and slaughter bulls sold steady with good demand and yearlings sold steady. The CME feeder cattle index 5/22/2020: up $0.72, $126.96.

LEAN HOGS:

Lean hog contracts, though unsure at the start of the day, rallied around the noon hour and closed higher to end the day. June lean hogs are up $1.72 at $60.50, July lean hogs are up $3.67 at $59.57 and August lean hogs are up $2.87 at $57.15. Hog cutout values bounced around trying to find a new stage of normal as hog slaughter continued to slowly rebuild.

Pork cutouts total 396.30 loads with 369.05 loads of pork cuts and 27.25 loads of trim. Pork cutout values: up $0.69, $97.44. Tuesday's slaughter is estimated at 405,000 head, 8,000 head more than a week ago and 72,000 head less than a year ago. The CME lean hog index 5/21/2020: down $1.14, $63.45.

WEDNESDAY'S CASH HOG CALL: Steady. As packers continue to sift through inventory, trying to add more each day, the built-up supply continues to outweigh demand.

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Tuesday Midday Livestock Market Summary - Refreshed and Ready for the New Week

General Comments

The marketplace is thriving midmorning Tuesday as all three livestock contracts continue to trade higher and even though it's early in the week, a light run of cash cattle have traded for $190 in parts of Nebraska. Significant trade will most likely hold off until later in the week but seeing prices come out strong this early is another good sign for the market this week. July corn is up 1 1/2 cents per bushel and July soybean meal is up $0.10. The Dow Jones Industrial Average is up 567.42 points and NASDAQ is up 75.36 points.

LIVE CATTLE

Live cattle contracts may not be rallying the solid $3.00 or higher like the feeder cattle complex is, but the substantial $1.70 to $2.00 gains seen throughout the complex is warmly welcomed. June live cattle are up $1.72 at $99.40, August live cattle are up $1.82 at $99.15 and October live cattle are up $1.82 at $101.22. Seeing that both the June and August contracts are within a $1.00 of the $100.00 threshold, leaves the market with a decision to make. Is there enough support and enough traders around willing to buy into the marketplace to push past the $100 benchmark? Or will the market trade higher, but without coming in full contact with the resistance? Solid support builds within the market as cash cattle have already traded steady this week. Some light trade is developing in parts of Nebraska at $190, which is fully steady with the top end of last week's business. Showlists this week appear to be higher in all feeding regions and especially in Texas.

Boxed beef prices are lower: choice down $10.73 ($386.01) and select down $9.62 ($364.56) with a movement of 149 loads (97.46 loads of choice, 14.69 loads of select, 3.29 loads of trim and 33.91 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts head into Tuesday ready to capture all of what the day has to offer and push contracts into mostly triple-digit gains. August feeders are up $4.30 at $133.07, September feeders are up $3.87 at $134.02 and October feeders are up $3.65 at $134.90. Last week, the market danced mostly lower as there was pressure on both live cattle and feeder cattle contracts. Seeing that fat cattle are testing the market this week already fully steady with last week's prices, if the board can rally on the live cattle side of things, the feeder cattle contracts are appearing to be growing in strength. This comes as a pleasant surprise as cattle producers look forward to seeing what the first large runs of videos sale do in the next couple of weeks for feeder cattle.

LEAN HOGS

The lean hog complex wasn't completely sure about the day's ambition to rally higher but has since warmed up to the idea and is trading right along with cattle contracts. June lean hogs are up $2.17 at $60.95, July lean hogs are up $3.42 at $59.32 and August lean hogs are up $2.60 at $56.87. Morning pork cutout values skyrocketed pushing upwards of $10 higher, so heading into the afternoon it will be interesting to see where those prices close and see how demand changes over the next little while.

The projected lean hog index for 5/22/2020 is down $1.15 at $62.30, and the actual index for 5/21/2020 is down $1.15 at $63.45. Hog prices are lower on the National Direct Morning Hog Report, down $2.61 with a weighted average of $36.20, ranging $32.00 to $39.00 on 4,805 head sold. Pork cutouts total 193.86 loads with 178.61 loads of pork cuts and 15.25 loads of trim. Pork cutout values: up $10.06, $106.81.

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