GENERAL COMMENTS:
This
past week had a lot to offer for the livestock sector. Cattle contracts
rallied toward the latter half of the week and both the cash hog and
cattle markets eagerly pushed for higher prices and packers paid up.
Hog
prices on the National Direct Afternoon Hog Report closed 1.35 higher
with a weighted average of $38.00, on 4,533 head sold. July corn is up 1
1/4 cents per bushel and July soybean meal is up $2.70. The Dow Jones
Industrial Average is up 455.43 points and NASDAQ is up 141.66 points.
From
Friday to Friday livestock futures scored the following changes: June
live cattle up $7.40, August live cattle up $7.65; May feeder cattle up
$10.08, August feeder cattle up $9.30; June lean hogs down $1.00, July
lean hogs down $2.40.
LIVE CATTLE:
When
the countryside is dry, farmers and ranchers pray for rain and dread
the idea of having to start feeding earlier than they had planned.
Whenever cattlemen get a spring shower, a little rain is always
appreciated, but there's nothing that makes grass come live like a good
soak! This week's cattle market felt just like that -- the markets have
seemed to gone to hell and back through the chaos that COVID-19 has
created, but seeing the board strengthen in the latter part of the week,
and seeing upwards of $15 cash cattle advancements, spurred some hope
and optimism.
Live cattle contracts battled
back and forth, feeling pressured to close lower but still wanting to
trade higher. Nearby contracts were able to hold firm through closing,
but deferred contracts weakened as time progressed. June live cattle
closed $0.67 higher at $94.65, August live cattle closed $0.25 higher at
$100.20 and October lie cattle closed $0.25 higher at $104.27. A light
live trade was reported Friday afternoon at $115, $5 higher than
Thursday's business, but when compared to last week's weighted averages,
that is $15 higher in Texas, $14 higher in Kansas and $17 higher in
Nebraska. This week's Northern dressed range was $145 to $183, while the
full Southern live range was $95 to $115.
Putting
your finger on why exactly the complex rallied is challenging. Is it
the hope that packing plants will be up and running sooner rather than
later? Is it that the President called upon the DOJ to look into the
markets? Or could it be that feeders rallying together and pushing
prices higher created a countryside movement? Regardless of the rhyme or
reason, the fact remains that the market has a long way to move before
feeders can be profitable. Friday's slaughter is estimated at 85,000
head, 8,000 head more than a week ago and 31,000 head less than a year
ago. Saturday's slaughter is projected to be around 44,000 head.
Boxed
beef prices closed higher: choice up $2.34 ($460.88) and select up
$0.42 ($448.99) with a movement of 106 loads (52.71 loads of choice,
9.99 loads of select, 32.41 loads of trim and 11.35 loads of ground
beef).
MONDAY CASH CATTLE CALL: Steady. A $15.00 advancement is a lot in one week!
FEEDER CATTLE:
Feeder
cattle contracts gave back half of what Thursday rallied, but even with
Friday's lackluster close, the market made lofty advancements this
week. With some Northern states getting rain, yearling buyers continue
to be interested in good, green quality yearlings and the overall feeder
cattle market developed some optimism this past week. May feeders
closed $2.37 lower at $127.90, August feeders closed $1.20 lower at
$136.95 and September feeders closed $0.87 lower at $138.15.
At
Ft. Pierre Livestock Auction in Ft. Pierre, South Dakota, compared to
last week, yearling steers and heifers were $2.00 to $3.00 higher on a
light test; steer calves from 450 to 699 pounds were mostly $3.00 to
$5.00 higher, heifer calves from 500 to 649 pounds were generally $4.00
to $6.00 higher. Other weight classes weren't tested enough to develop
an accurate market. Demand was phenomenal for the yearlings offered with
many buyers competing for the available yearlings cattle. The CME
feeder cattle index 5/7/2020: not available at the time of publishing.
LEAN HOGS:
The
lean hog market hit some resistance at $67.00 and has since slowly
traded lower to Friday's close. The board wasn't able to capture gains
like the cattle contracts were able to, but seeing some substantial
strength in the cash market is encouraging as kills have started to amp
up over the past week little by little. June lean hogs closed $2.20
lower at $61.70, July lean hogs closed $1.77 lower at $61.72 and August
lean hogs closed $2.22 lower at $60.42.
Pork
cutouts totaled 329.87 loads with 302.31 loads of pork cuts and 27.56
loads of trim. Pork cutout values: down $0.24, $116.50. Friday's
slaughter is estimated at 328,000 head, 55,000 head more than a week ago
and 113,000 head less than a year ago. Saturday's slaughter is
projected to be around 226,000 head. The CME lean hog index 5/6/2020: up
$3.84, $66.18.
MONDAY'S CASH HOG CALL:
Steady to slightly stronger. Given the chaotic market we are faced with
right now, there's a lot of time to pass until Monday morning, but I
find it every encouraging that heading into the weekend packers are sure
enough tapping into the cash market and interested in getting more hogs
secured. Hopefully by next week we will hear more plants coming back on
and the market will see more and more progress in killing capacity.
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| #completecalfcare |
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