Wednesday Midday Livestock Market Summary - Sluggish Tones Continue to Drive Contracts Lower

GENERAL COMMENTS:

Sluggish tones continue to drive both the cattle and hog markets lower as sufficient support to justify higher trade is lacking. Still no cash cattle trade has developed and it's likely trade will be delayed until Thursday or Friday of this week. July corn is down 3 3/4 cents per bushel and July soybean meal is up $4.00. The Dow Jones Industrial Average is up 24.14 points.

LIVE CATTLE:

Traders are once again sending the live cattle contracts lower as midday boxed beef prices are lower and no riveting support has developed in the cash sector. It is odd to see asking prices posted already in the North as usually the Southern Plains are first to post their asking prices and then later in the week the North's asking prices surface. Northern feedlots are asking $305 to $306, but no bids have surfaced yet. June live cattle are down $0.17 at $182.00, August live cattle are down $0.35 at $178.07 and October live cattle are down $0.50 at $180.30. It's unlikely any trade will develop Wednesday, but packer interest should improve by Thursday.

Boxed beef prices are lower: choice down $1.81 ($315.07) and select down $1.89 ($302.58) with a movement of 78 loads (47.20 loads of choice, 13.45 loads of select, 6.41 loads of trim and 10.74 loads of ground beef).

FEEDER CATTLE:

With the live cattle complex lending no support and nothing having developed yet in the cash cattle market -- the feeder cattle contracts are again trading lower as support is seeming hard to come by. August feeder cattle are down $1.45 at $254.62, September feeders are down $1.42 at $256.17 and October feeders are down $1.37 at $257.17. Thankfully the weakness that's being seen in the futures complex hasn't affected the countryside feeder cattle sales as the CME Feeder Cattle Index closed at $250.89 Tuesday afternoon. More than anything, traders need a shot of strong fundamental support to shake the dreariness pervading the cattle sector.

LEAN HOGS:

The lean hog complex is continuing to trade lower as the market is again looking for a new support plane or technical interest to come to its rescue. After breaking through the market's current support Tuesday, the complex has continued to trend lower even though midday pork cutout values are up noticeably. Unfortunately given the weakened nature of the market's current pork demand, traders are going to need to see more than a single day's worth of higher pork cutout values before they'll confidently trade the futures complex higher. June lean hogs are down $0.32 at $92.37, July lean hogs are down $1.62 at $92.30 and August lean hogs are down $1.75 at $91.80.

The projected CME Lean Hog Index for 6/4/2024 is up $0.13 at $92.06 and the actual index for 6/3/2024 is up $0.20 at $91.93. Hog prices on the Daily Direct Moring Hog Report average $87.20, ranging from $85.00 to $88.00 on 1,854 head and a five-day rolling average of $87.32. Pork cutouts total 160.72 loads with 129.40 loads of pork cuts and 31.32 loads of trim. Pork cutout values: up $2.59, $103.35.

Wednesday Morning Livestock Market Update - Further Pressure on Hog Futures Expected

GENERAL COMMENTS:

Cattle tried to make a run higher Tuesday, but failed as buying did not follow through. Traders want the market to move higher due to tighter supplies and the potential to remain that way for the entire year. However, the buying Tuesday was temporary and the day ended with minor losses. Cash cattle did not trade, as it seldom does during the first-half of the week. The positive aspect is boxed beef continued higher for the second day. Choice gained $1.28 with select up $0.77. Traders seem concerned the pattern of last week may again follow this week. Cattle weights seasonally increase in the summer and with already significantly higher weights than last year, price potential may be limited.

July hog futures gapped lower on the open and never looked back. Futures contracts broke support, triggering aggressive liquidation. The market pancaked lower with prices moving to and closing at the lowest level since January. Nearly the entire gains of the year have now been erased. The oversold market begs for a short-covering rally, but technical traders are having none of it. The National Direct Afternoon Hog report showed cash down $0.57 with a weighted average of $88.78. Cutouts provided no support, declining $0.67. Follow-through selling may continue as funds liquidate long positions and margin calls force traders out of the market.

	BULL SIDE		BEAR SIDE
1)	Boxed beef prices were higher again Tuesday, indicating beef demand remains strong.	1)	The available cattle are substantially heavier, requiring fewer animals for the volume of beef needed. Cattle are backed up in the market to some extent.
2)	Packers may need to step up and bid higher to obtain the cattle they need to supply the strong demand, even though they have some purchased ahead.	2)	Beef demand may slow as summer progresses. Hotter weather generally reduces overall consumption.
3)	Hog futures are extremely oversold and will not go down forever. The market is being stretched and ripe for a retracement.	3)	Hog futures breaking support and closing near the lows may see follow-through selling Wednesday.
4)	The July hog contract left a gap on the open Tuesday that needs to be filled. That may happen sooner rather than later. The weakness was the result of stops being triggered rather than new selling.	4)	Slower pork demand remains a concern and the variable pork cutout values support that concern, leaving traders bearish.

Tuesday Closing Livestock Market Update - Lackadaisical Tones Lead the Complex Lower

GENERAL COMMENTS:

Early in the day, the cattle contracts traded higher, but by Tuesday's end, the entire livestock complex was pressured into closing lower as support was tough to come by for the markets. Still no cash cattle trade has developed, and trade will likely be delayed until Thursday or Friday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.57 with a weighted average price of $88.78 on 5,689 head. July corn is down 1 cent per bushel and July soybean meal is down $4.40. The Dow Jones Industrial Average is up 116.41 points.

LIVE CATTLE:

The live cattle complex was trading higher ahead of the day's noon hour, but without much developing fundamental yet in the week, traders were short of the support that they needed to comfortably trade the market higher. June live cattle closed $0.15 higher at $182.17, August live cattle closed $0.42 lower at $178.45 and October live cattle closed $0.10 lower at $180.80. There still hasn't been any cash cattle trade reported and it's likely that the week's trade will be delayed until late in the week as packers and feedlot managers again will go toe to toe as packers want to keep prices from trading any higher, and feedlot managers know that now is the time to advance the market ahead of the dog-days-of-summer. 

Tuesday's slaughter is estimated at 123,000 head -- steady with a week ago and 2,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.28 ($316.88) and select up $0.77 ($304.47) with a movement of 143 loads (105.74 loads of choice, 16.54 loads of select, 6.73 loads of trim and 14.27 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady to $1.00 higher. Even though packers were able to keep cash prices from trading higher last week, if they're going to supply retailers with enough product to market, they're going to need to continue to be active in the cash market.

FEEDER CATTLE:

The feeder cattle complex tried to trade higher through the day's end, but support wasn't alive and active enough through the day's end to sustain the market's higher aim. August feeders closed $0.17 lower at $256.02, September feeders closed $0.27 lower at $257.60 and October feeders closed $0.30 lower at $258.55. Thankfully the spot August contract was able to close above the market's 40-day moving average which remains a key threshold to continue to monitor. At Joplin Regional Stockyards in Carthage, Missouri compared to their last sale two weeks ago, steers under 600 pounds sold steady to $5.00 lower with heavier weights selling $3.00 to $7.00 higher. Heifers under 600 pounds sold $2.00 to $7.00 lower. Heavier-weighted heifers traded $2.00 to $8.00 higher. Feeder cattle supply over 600 pounds was 60%. The CME feeder cattle index 6/3/2024: not available at this time.

LEAN HOGS:

It was a brutal Tuesday market for the lean hog complex. Not only did pork cutout values and cash hog prices close lower, but the futures complex also broke through support levels indicating that the market could be in for more technical pressure in the near term. June lean hogs closed $0.95 lower at $92.70, July lean hogs closed $2.35 lower at $93.92 and August lean hogs closed $2.07 lower at $93.55. The belly's $10.31 decline was the cutout value's biggest reason for closing lower, which continues to be a volatile cut. Pork cutouts totaled 323.98 loads with 291.49 loads of pork cuts and 32.50 loads of trim. Pork cutout values: down $0.67, $100.76.

Tuesday's slaughter is estimated at 481,000 head -- 6,000 head more than a week ago and 12,000 head more than a year ago. The CME lean hog index 5/31/2024: down $0.24, $91.73.

WEDNESDAY'S HOG CALL: Lower. With the futures market closing sharply lower and pork demand continuing to be volatile, it's unlikely that packers will advance the cash market at this time.

Tuesday Midday Livestock Market Summary - Cattle Find Support After Monday's Softer Trade

GENERAL COMMENTS:

The cattle contracts have rebounded from their sluggish tone on Monday and are thankfully trading fully higher into Tuesday's noon hour. The lean hog complex hasn't been as fruitful as traders remain hesitant to overly support that market while demand remains weak. July corn is down 1/4 cent per bushel and July soybean meal is down $3.20. The Dow Jones Industrial Average is down 62.34 points.

LIVE CATTLE:

With the help of continued beef demand, the live cattle complex is backing to rallying and is approaching Tuesday's noon hour fully higher. June live cattle are up $0.72 at $182.75, August live cattle are up $0.32 at $179.17 and October live cattle are up $0.57 at $181.47. No cash cattle trade has developed yet and it's likely that the week's trade is delayed until Thursday or Friday of this week. Packers weren't as aggressive in last week's cash market, and if demand remains strong, they could be pressured into supporting this week's cash market more aggressively as they need to ensure that they have beef to market and sell during peak springtime demand.

Boxed beef prices are higher: choice up $1.22 ($316.82) and select up $2.04 ($305.74) with a movement of 82 loads (57.18 loads of choice, 10.61 loads of select, 6.58 loads of trim and 8.01 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is back to trading higher as the market has thankfully shaken the sluggish nature that Monday's market possessed. It helped too that Monday's CME feeder cattle index closed $2.53 higher at $250.77 -- again signaling just how strong feeder cattle demand is in the countryside. August feeders are up $0.65 at $256.85, September feeders are up $0.27 at $258.15 and October feeders are up $0.35 at $259.20. With the live cattle complex lending support, it's likely that feeders continue with this higher trend through the afternoon and most likely through the day's close.

LEAN HOGS:

Midday pork cutout values may be higher, but the lean hog complex is enduring sharp pressure as the market is currently trading below its support plane. Demand hasn't been sufficient in recent weeks and with there being continued concerns about how demand will fair over the summer -- the complex has little choice but to continue to trade lower. June lean hogs are down $0.65 at $93.02, July lean hogs are down $1.62 at $94.60 and August lean hogs are down $1.52 at $94.10.

The projected lean hog index for 6/3/2024 is up $0.20 at $91.93, and the actual index for 5/31/2024 is up $0.24 at 91.73. Hog prices on the Daily Direct Morning Hog Report are not available due to confidentiality. However, we can see that only 739 head have traded and that the market's five-day rolling average now sits at $87.47. Pork cutouts total 158.90 loads with 147.49 loads of pork cuts and 11.41 loads of trim. Pork cutout values: up $1.26, $102.69.