GENERAL
COMMENTS: Initial pressure in lean hog trade eased throughout Thursday's
session, and futures ended mixed to mostly higher. The ability to bring
buyer interest back to cattle and hog futures helped to stabilize the
entire complex. Cash cattle remains light, as most of the needed trade
was done on Wednesday. Light live cattle trade in the North developed at
$116 per cwt. This is $1 per cwt lower than last week and fits in
nicely with the general trend of steady to $2 per cwt lower in all
areas. Bids remain on the table at $114 per cwt live and $184 to $186
per cwt dressed. But it is uncertain whether additional trade will be
seen before the end of the week. The National Daily Direct afternoon hog
report was $0.96 higher ($72-$83, weighted average $80.20) on 8,306
head sold. Corn futures shifted lower in light trade with July down 4
3/4 cents per bushel. The Dow Jones Index was 351 points lower with
NASDAQ down 139 points.
LIVE CATTLE: Limited support trickled into live
cattle trade as the market faces growing uncertainty ahead of the long
weekend. Futures closed mixed, $0.02 lower to $0.32 higher. The
combination of Wednesday's cold storage report, which showed a lower
inventory of beef and a 44% increase in beef export sales over the
previous week, helped bring buyers back to the table. Traders still
remain concerned about expected growth in feedlot numbers in Friday's
Cattle on Feed report. If pre-report expectations are correct, cattle on
feed numbers would be the highest for May in history. This could
pressure the market as traders focus on supply growth through the
summer. Beef cut-outs: higher, up $0.72 (select, $206.53) to up $1.04
(choice, $220.79) with moderate-to-good demand and light offerings, 119
loads (71 loads of choice cuts, 21 loads of select cuts, 5 load of
trimmings, 21 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady with early
week trade. Following light-to-moderate trade Wednesday and Thursday,
most of the cash business is expected to have wrapped up. There may be
some additional cleanup trade following the Cattle on Feed report. But
without a major shakeup in futures trade, it appears that the tone of
the market is set with prices steady to $2 per cwt lower than last week.
FEEDER CATTLE: Feeder cattle futures closed
steady to $0.42 higher. Light support was seen Thursday as traders
focused on recent support in the live cattle market on lower beef
supplies and increased exports. But concerns over how the Cattle on Feed
report Friday will affect the feeder cattle and live cattle trade are
still front and center on traders' minds. But with bearish expectations,
it is likely that much of the pressure has already been factored into
the market over the last several days. The CME cash feeder index for
5/21 was unreported at the time these comments were posted.
LEAN HOGS: Late-day buying was seen in lean hog
trade as traders continued to focus on China sales. Futures settled
$0.22 lower to $0.35 higher. Traders quickly pulled back from early
triple-digit losses after initial active liquidation gained very limited
support. June and July futures closed lower with the rest of the market
holding limited gains. Pork cutouts were unavailable at the time these
comments were posted. The CME cash lean index for 5/21 is $84.39, up
$0.02. DTN Projected lean index for 5/22 is $84.36, down $0.03.
FRIDAY'S CASH HOG CALL: Steady to $2 lower.
Market shifts the last several days will likely limit volume at the end
of the week. With packers on the front end of a long holiday weekend, it
is likely that many will keep production as close to normal as
possible. Friday's slaughter is expected at 462,000 head. Saturday runs
are expected near 43,000 head.
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