Tuesday Closing Livestock Market Update - Cattle Successively Close Higher Again

GENERAL COMMENTS:

It was a strong day for the cattle complex as traders advanced both the live cattle and feeder cattle markets, but the lean hog market remains apprehensive about trading higher as demand hasn't consistently been strong. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.19 with a weighted average price of $87.83 on 3,095 head. July corn is down 2 1/4 cents per bushel and July soybean meal is down $9.90. The Dow Jones Industrial Average is down 216.73 points.

LIVE CATTLE:

All in all, it was another positive, powerful day for the live cattle complex as the market again closed higher seeming to follow behind the aggressive momentum in the feeder cattle complex. June live cattle closed $0.85 higher at $184.55, August live cattle closed $0.70 higher at $181.82 and October live cattle closed $0.45 higher at $184.40. So long as beef demand continues to show strong interest, it's likely that the futures complex will be well supported as the cash cattle market is expected to trade steady to somewhat higher again this week. The fact remains that feedlots hold the lion's share of the market's leverage and if they aren't given the money they year for, they're in a position where they can afford to hold on to their showlists and roll them over to the next. No cash cattle trade developed throughout the day, and asking prices and bids remain elusive at this point. It's not likely that any trade will develop ahead of Thursday. Tuesday's slaughter is estimated at 123,000 head -- 1,000 head more than a week ago and 1,000 head less than a year ago. Monday's slaughter is estimated at 2,000 head. June live cattle closed $0.85 higher at $184.55, August live cattle closed $0.70 higher at $181.82 and October live cattle closed $0.45 higher at $184.40.

Last week Southern live cattle traded for mostly $187, which is $1.00 higher than last week's weighted average; Northern dressed cattle traded for mostly $302 to $305, which is steady to $5.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 67,936 head. Of that 77% (52,013 head) were committed to the nearby delivery while the remaining 23% (15,923 head) were committed to the deferred delivery.

Boxed beef prices closed higher: choice up $1.67 ($312.12) and select up $1.71 ($303.43) with a movement of 117 loads (71.34 loads of choice, 21.24 loads of select, 8.25 loads of trim and 16.00 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Higher. With boxed beef demand still thriving, it's likely that cash cattle prices will trade at least steady, if not some higher later this week.

FEEDER CATTLE:

The feeder cattle complex charged onward all through Tuesday's market as the support wasn't hard to come by in today's trading arena. Between corn prices closing lower, Friday's Cattle on Feed report being bullish and continuing to show limited supplies in the months ahead, and feeder cattle demand in the countryside remaining incredibly strong -- it was nearly effortless for traders to run the complex $3.00 to $4.00 higher ahead of the day's end. August feeders closed $4.37 higher at $264.60, September feeders closed $3.95 higher at $265.70 and October feeders closed $3.70 higher at $266.25. The CME feeder cattle index 5/27/2024: not available at this time.

LEAN HOGS:

The lean hog complex saw afternoon pork cutout values and cash hog prices close higher, but still, the market's nearby contracts remain skeptical of advancing whatsoever as nearby demand continues to be a finicky market. If traders saw demand increase over a series of consecutive days, or weeks, then it's likely that they'd have a different attitude, but one day of higher prices isn't enough to change their minds. June lean hogs closed $0.47 lower at $93.80, July lean hogs closed $0.70 lower at $96.52 and August lean hogs closed $0.80 lower at $96.10. Pork cutouts totaled 294.00 loads with 248.71 loads of pork cuts and 45.29 loads of trim. Pork cutout values: up $4.26, $103.40. Tuesday's slaughter is estimated at 485,000 head -- 14,000 head more than a week ago and 8,000 head more than a year ago. Monday's slaughter is estimated at 2,000 head. The CME lean hog index 5/23/2024: down $0.14, $91.63.

WEDNESDAY'S HOG CALL: Higher. Given that packers showed more aggression in buying early in the week than what they normally do, it's likely that they're somewhat short bought and will need to buy more hogs throughout the week.

Tuesday Midday Livestock Market Summary - Traders Respond Positively to Friday's Cattle on Feed Report

GENERAL COMMENTS:

The cattle complex is trading higher into Tuesday's noon hour as the market is currently well supported by Friday's encouraging Cattle on Feed report and by continued beef demand. Meanwhile, the lean hog complex is trading mixed as the nearby contracts continue to question demand in the immediate future while the deferred contracts inch modestly higher. July corn is down 2 3/4 cents per bushel and July soybean meal is down $9.90.

The Dow Jones Industrial Average is down 173.68 points.

LIVE CATTLE:

The live cattle complex is trading modestly higher into Tuesday's noon hour as traders are encouraged by Friday's strong Cattle on Feed report and the continued support of higher boxed beef prices. June live cattle are up $0.45 at $184.15, August live cattle are up $0.32 at $181.45 and October live cattle are up $0.32 at $184.27. It's still too early to know what this week's cash cattle trade is going to amount to, but if beef demand continues to trend higher, there's a chance the cash cattle market could trade higher again this week.

Last week Southern live cattle traded for mostly $187, which is $1.00 higher than last week's weighted average; Northern dressed cattle traded for mostly $302 to $305, which is steady to $5.00 higher than the previous week's weighted average.

Boxed beef prices are higher: choice up $2.06 ($312.51) and select up $1.49 ($303.21) with a movement of 52 loads (30.37 loads of choice, 10.06 loads of select, zero loads of trim and 11.54 loads of ground beef).

FEEDER CATTLE:

Between last Friday's bullish Cattle on Feed report, to the slight decline in corn prices, the feeder cattle complex has all the support it needs to trade higher. August feeders are up $3.92 at $264.15, September feeders are up $3.50 at $265.25 and October feeders are up $3.25 at $265.80. The market is currently thriving as it's in what seems to be a "perfect storm" as demand continues to drive boxed beef prices higher and feeder cattle interest in sale barns across the country remains incredibly strong. The market is just three short weeks out from seeing what the first big online feeder cattle sales are going to do for the year and, at this point, higher prices seem likely.

LEAN HOGS:

Even though midday pork cutout values are noticeably higher, the lean hog complex continues to trade mixed with the market's nearby contracts lower while the deferred months trade mildly higher. Traders and pork producers both like to see the midday carcass price higher, but after a long stretch of weak pork demand, traders want to see continued pork interest at the meat counter before they'll begin to believe that demand is substantiating. Not to mention, the carcass price is being heavily influenced by the $10.15 rally in the belly. June lean hogs are down $0.25 at $94.00, July lean hogs are down $0.55 at $96.70 and August lean hogs are down $0.77 at $96.12.

The projected CME Lean Hog Index for 5/24/2024 is down $0.37 at $91.26, and the actual index for 5/23/2024 is down $0.14 at $91.63. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidently. However, we can see that only 205 head have traded and the market's five-day rolling average now sits at $86.97. Pork cutouts total 154.10 loads with 123.31 loads of pork cuts and 30.80 loads of trim. Pork cutout values: up $4.23, $103.37.

Tuesday Morning Livestock Market Update - Cattle Futures Expected Higher

GENERAL COMMENTS:

Cattle futures were higher for the week but coasted into the weekend ahead of the Cattle on Feed report. The report was considered neutral to a bit friendly in the long term. To some extent, this may have been already factored in as futures were higher for the week, but most of the gains were likely due to higher cash cattle trade. However, the numbers will remain tight according to the report. Southern cattle traded $1.00 higher while Northern dressed cattle traded as much as $5.00 higher with the average price in Nebraska reaching an all-time high. It is interesting cattle futures are not at new contract highs even though cash is at a record high. Boxed beef prices were higher with choice up $0.61 and select up $1.64. Fund traders increased their long positions by 7,843 futures contracts on the Commitments of Traders report, bringing their net-long futures positions in live cattle to 49,463 contracts. The funds reduced their net-long futures positions in feeder cattle to 4,204 contacts, a decrease of 207 contracts.

Hog futures have much to overcome as the National Direct Afternoon hog report on Friday was down $1.63 with a weighted average of $86.64. The higher slaughter level is overwhelming demand, resulting in continued pressure on the market. The market is oversold technically, but that will not cause a price rally. There needs to be consistent fundamental support. Interestingly, fund traders remain long in the market with the Commitments of Traders report showing them holding a net-long futures position of 44,171 contracts. However, this was a decline of 12,931 contracts from the previous week. Cutouts were higher Friday posting a gain of $0.45. The packers may be more aggressive Tuesday as they need to purchase hogs for the week to makeup for the 3-day holiday.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report was neutral to friendly with tighter numbers continuing to support the market.	1)	Cattle futures may have the Cattle on Feed report already factored in which may result in some profit-taking Tuesday.
2)	Higher cash cattle last week will provide confidence to feedlots to hold for more this week.	2)	Boxed beef prices may trend lower now that Memorial Day demand is finished and consumers settle down to regular demand and high beef prices.
3)	Hog futures are substantially oversold and nearing technical support. This could trigger short-covering.	3)	Hog futures have not found consistent support from cash and cutouts. This keeps the concern of reduced demand alive and well.
4)	Retail outlets will need to restock shelves, which will support cutout prices.	4)	Hog futures are oversold but that does not mean the market will rally. It can remain that way for an extended period.

Friday Closing Livestock Market Update - Feedlots Continue to Hold Out for Higher Prices

GENERAL COMMENTS:

The cattle complex pulled back ahead of Friday's close in preparation for the afternoon's Cattle on Feed report, but thankfully no bearish surprises were found there, and the market should be able to rally on its strong fundamentals again early next week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.63 with a weighted average price of $86.64 on 1,317 head. July corn is up 3/4 cent per bushel and July soybean meal is up $9.80. The Dow Jones Industrial Average is up 4.33 points.

From Friday-to-Friday livestock futures scored the following changes: June live cattle up $2.65, August live cattle up $2.07; August feeder cattle up $0.38, September feeder cattle up $0.90; June lean hogs down $2.22, July lean hogs down $2.82; July corn up $0.12, September corn up $0.12.

Friday's Cold Storage Report shared that total red meat supplies in freezers was up 4% from the previous month but down 9% from last year. Total pounds of beef in freezers were down 1% from the previous month and down 5% from last year. Frozen pork supplies were up 8% from the previous month but down 12% from the last year. Stocks of pork bellies were up 3% from last month but down 6% from last year.

LIVE CATTLE:

The live cattle complex closed mixed with the June and August 2024 contracts closing slightly higher while the rest of the complex closed modestly lower. The market seems to pull back modestly ahead of closing as traders have grown accustomed to doing so before the monthly Cattle on Feed reports are shared, but the June and August 2024 contracts didn't bother to do so as the market was elated by this week's strong performance in the cash cattle complex. Bids have been sitting on the table throughout the day, but at the time of this writing, no more cash cattle sales have been noted following what transpired on Thursday. Thus far this week Southern live cattle have sold mostly for $187 which is $1.00 higher than last week's weighted average, and Northern dressed cattle traded anywhere from $300 to $304 which is steady to $5.00 higher than last week's weighted average. Depending on where the week's weighted average falls in the Northern plains if the market averages $304, that's a new all-time high for the region. June live cattle closed $0.17 higher at $183.70, August live cattle closed $0.05 higher at $181.12 and October live cattle closed $0.12 lower at $183.95.

All in all, Friday's Cattle on Feed report should be viewed as bullish long-term given that on feed numbers were decreased, placements were less than a year ago and marketings were higher than a year ago. Click here to read DTN's Cattle on Feed comments:

Friday's slaughter is estimated at 117,000 head -- 15,000 head more than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 4,000 head. The week's total slaughter is estimated at 607,000 head -- 9,000 head more than the previous week and 18,000 head less than a year ago.

Boxed beef prices closed higher: choice up $0.61 ($310.45) and select up $1.64 ($301.72) with a movement of 107 loads (74.23 loads of choice, 13.80 loads of select, 7.57 loads of trim and 11.49 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady. It's a coin toss on how next week's cash cattle market will trade as at some point packers will have enough supply around them that they won't have to support the cash sector, but pinpointing when that occurs exactly remains the question as packers also can't go without having enough product to market during this time when boxed beef prices are so high.

FEEDER CATTLE:

The feeder cattle complex pulled back ahead of Friday's close as traders were anxious to see the Cattle on Feed data. Thankfully the report came out as expected, so no bearish consequences should be in store for next week's market. August feeders closed $1.22 lower at $260.22, September feeders closed $0.97 lower at $261.75 and October feeders closed $0.77 lower at $262.55. Even though the futures complex closed lower, the feeder cattle market is still seeing ample demand as the CME feeder cattle index closed above $250 -- which shows how aggressively buyers are bidding on feeders to get their orders filled. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week steers and heifers over 700 pounds traded $4.00 to $9.00 higher and steers and heifers under 700 pounds sold steady to $2.00 higher. Slaughter cows sold steady to $3.00 higher and slaughter bulls traded steady. The CME feeder cattle index 5/23/2024: up $1.33, $250.14.

LEAN HOGS:

It was another painful week for the lean hog complex as the market is trading day in and day out, but simply not receiving the demand it years for. Some of the market's deferred contracts were able to close slightly higher, but the lack of demand kept the nearby contracts from closing higher. Pork cutout values did round out the day slightly higher -- but after a full week of mostly lower trading, the day's slight uptick in carcass price wasn't much support from the market. June lean hogs closed $0.25 lower at $94.27, July lean hogs closed $0.25 lower at $97.22 and August lean hogs closed $0.12 lower at $96.90. Pork cutouts totaled 227.53 loads with 207.08 loads of pork cuts and 20.45 loads of trim. Friday's slaughter is estimated at 451,000 head -- 17,000 head less than a week ago but 1,000 head more than a year ago. Saturday's slaughter is projected to be around 10,000 head. The CME pork cutout index 5/22/2024: down $0.05, $91.77. Pork cutout values: up $0.45, $99.14.

TUESDAY'S HOG CALL: Lower. Given that pork demand is still an issue, packers won't likely bid the cash market aggressively.