CattleLink Market View

Live cattle: The live cattle complex was suppressed last week, as the market couldn’t handle the resistance that the contracts came up against and was forced to trade lower later in the week. Traders were fearful of what the May 1 USDA Cattle on Feed report on Friday was going to reveal. Throughout the week, Southern live cattle traded at $260, which was steady with the previous week’s weighted average, and Northern dressed cattle traded at $410 to $412, which was $1 lower to $1 higher than the previous week’s weighted average.

Feeder cattle: The feeder cattle complex followed in line with the live cattle market’s behavior early in the week. However, it was sent tumbling lower ahead of Friday’s Cattle on Feed report, as placements were rumored to be substantially higher. And, lo and behold, placements were indeed higher in Friday’s COF report, totaling 1,702,000 head, or 6% higher than a year ago.

Lean hogs: The lean hog complex struggled throughout the week. The market simply can’t attract the technical support it needs from traders, nor has it seen the fundamental support it needs from consumers or the cash market. By Friday’s close, the spot July contract ended the day at its lowest position since last December.

Corn: July corn futures finished the week up 7 1/2 cents, closing at $4.63 1/4. Most of the corn market’s gains came via a 20-cent-plus surge on Monday, May 18, before prices faded through the balance of the week. Bullish traders are beginning to show concern regarding the hefty net-long position built through the spring, with no issues through planting thus far and a rainy two-week outlook through early June.

Soybean meal: July meal futures fell $2.40 through the week, closing at $331.90, and posting a key reversal candle on Friday, May 22. Demand for U.S. meal remains exceptionally strong, as evidenced by the inverted spread structure between futures contracts and positive basis levels in Illinois.