GENERAL COMMENTS:
It's nice to see both the live cattle and lean hog complex strengthen heading into the week's close. Tyson shared Thursday afternoon that they have partnered with Matrix Medical Network to provide healthcare at the facilities. Hopefully this is an indication that plants will be back up to speed sooner rather than later. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.87 with a weighted average of $37.53 on 8,155 head sold. July corn is up 5 1/2 cents per bushel and July soybean meal is up $6.50. The Dow Jones Industrial Average is down 288.14 points and NASDAQ is down 25.16 points.
LIVE CATTLE:
The live cattle complex closed the day fully higher and substantially higher in nearby contracts. June live cattle closed $1.67 higher at $85.95, August live cattle closed $1.32 higher at $92.10 and October live cattle closed $0.70 higher at $96.32. There was another round of very light business in the North with dressed deals at mostly $150, generally steady with Tuesday and Wednesday's decline, but roughly $4 lower than last week's weighted average. Just a handful of trade was reported in the South around $95 to $96. Thursday's slaughter is estimated at 80,000 head, down 4,000 head from a week ago and down 43,000 head from a year ago.
Boxed beef prices close higher: choice up $10.18 ($367.56) and select up $10.25 ($350.16) with a movement of 111 loads (78.22 loads of choice, 19.09 loads of select, zero loads of trim and 13.49 loads of ground beef).
Every Thursday the USDA releases the Actual Slaughter Report from two week's prior. This allows them time to accurately receive all the data and information they may need to compile the report. If you look at the data over the last five reports, you'll notice a sharp decline in production.
For the week ending 3/21/2020, actual Slaughter Under Federal Inspection totaled 660,293 head of cattle. For the week ending 3/28/2020, actual slaughter totaled 684,835 head. The next week, ending 4/4/2020, actual slaughter totaled 631,299 head. Then, for the week ending 4/11/2020, actual slaughter totaled 528,808 head. Thursday's report, sharing the week ending 4/18/2020, total slaughter dipped below 500,000 head; 486,136 head total. Comparing the first listed report to the latest, slaughter has regressed by 174,157 head in a week's time.
The problem that arises from this mess isn't simple -- nothing is. Not only are we processing fewer cattle through this COVID-19 headache, but each and every week that the market continues to process fewer and fewer head, we are creating a backlog of cattle that are still going to need processed later down the road. And let's not forget that every day cattle sit in feedlots, it costs feedlots money and taking up space that new cattle could have occupied.
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that the trades already developed and are mostly done, the chances of prices rallying into Friday's trade are slim. There should be some more cattle to sell in the South but the North could be done for the week.
FEEDER CATTLE:
Feeder cattle contracts closed the day fully lower, dropping anywhere from $1.45 to $1.95 lower. May feeder closed $1.45 lower at $117.10, August feeders closed $1.95 lower at $126.50 and September feeders closed $1.52 lower at $128.15. At Winter Livestock in Pratt, Kansas, their midsession report showed that compared to last week, feeder steers weighing 500 to 700 pounds were $1.00 to $2.00 higher, 700 to 850 pound steers were $4.00 to $8.00 higher and steers above 850 pounds were $1.00 to $5.00 higher. Heifers weighing 800 to 900 pounds were steady to $2.00 lower, heifers under 800 pounds were $1.00 to $2.00 lower. The CME feeder cattle index 4/29/2020: down $0.04, $118.79.
LEAN HOGS:
The lean hog complex was able to take back what Wednesday lost and then some. June lean hogs closed $3.42 higher at $58.95, July lean hogs closed $2.02 higher at $60.50 and August lean hogs closed $1.70 higher at $62.80. Pork cutouts totaled 247.79 loads with 219.69 loads of pork cuts and 28.10 loads of trim. Pork cutout values made another record-breaking gain: up $9.99, $100.72. The last record was a jump of $6.55. Thursday's slaughter is estimated at 288,000 head, down 73,000 head from a week ago and down 181,000 head from a year ago. The CME lean hog index 4/28/2020: up $2.54, $52.26.
FRIDAY'S CASH HOG CALL: Steady. Seeing that cash prices closed slightly higher and that the board was able to close higher is a bullish push for Friday. However, heading into the week could disinterest packers as their kills are already limited.
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