GENERAL COMMENTS:
A
three-day weekend might be exactly what livestock contracts need.
Seeming to be weighed down by the mess of COVID-19, livestock contracts
aren't able to do much of anything until the backlog of cattle and hogs
is thoroughly processed and the market is current again. Hog prices
closed lower on the National Direct Afternoon Hog Report, down $0.68
with a weighted average of $38.68 on 4,694 head. July corn is up 1/4
cent per bushel and July soybean meal is up $1.60. The Dow Jones
Industrial Average is down 8.96 points and NASDAQ is up 39.70 points.
From
Friday to Friday, livestock futures scored the following changes: June
live cattle up $0.70, August live cattle down $0.50; August feeder
cattle down $2.27, September feeder cattle down $2.60; June lean hogs up
$0.90, July lean hogs down $1.85.
LIVE CATTLE:
Live
cattle contracts closed the week mixed with some deferred contracts
trying to meekly rally while nearby contracts felt the pressure of the
resistance at $100 all throughout the week. June live cattle closed
$1.10 lower at $97.70, August live cattle closed $0.90 lower at $97.32
and October live cattle closed $0.50 lower at $102.75. Cash cattle trade
was quiet all throughout Friday, with the day serving as mostly a clean
up day. The market was strong again this week as the prices were able
to jump $10 to $11 in both the Northern and Southern Plains. Friday's
slaughter is estimated at 102,000 head, 11,000 head more than a week ago
and 18,000 head less than a year ago. Saturday's slaughter is projected
to be around 56,000 head.
Friday's Cattle on
Feed Report came as no surprise, as both placement and marektings were
lower. Cattle and calves on feed were down 5% with 11.2 million head on
feed. Placements totaled 1.43 million head, which was down 22% from 2019
and the second lowest the report has ever been for April placements
since the series began in 1996. Marketings totaled 1.46 million head,
down 24% from 2019, the smallest ever recorded since the series began.
It's evident that COVID-19 has crippled the beef industry from every
angle and unfortunately these problems are going to take longer to fix
than many realize.
Boxed beef prices close
lower: choice down $5.07 ($396.74) and select down $8.35 ($374.18) with a
movement of 101 loads (46.14 loads of choice, 13.65 loads of select,
9.00 loads of trim and 32.06 loads of ground beef).
TUESDAY'S
CASH CATTLE CALL: It all depends on slaughter. Last week packers bought
right at 103,000 head and this week they were fairly aggressive again.
The industry needs the market to push as hard as possible to get to
normal levels so that carry-over from the last month -- going on two
months now -- can be worked through and the market can trade in some
fashion of normal.
FEEDER CATTLE:
Feeder
cattle contracts trended lower throughout the week but were able to
close slightly higher come Friday afternoon. August feeders closed $0.07
lower at $128.80, September feeders closed $0.02 higher at $130.15 and
October feeders closed $0.07 higher at $131.25. Some sale barns have
seen some rain in the later part of the week, which didn't help their
prices, but for the most part, feeder cattle traded strong this week as
buyers realize grass season is upon us and it's time to kick cattle out.
Given the sheer turmoil feedlots are enduring, with too many fat cattle
sitting in pens, having the availability to go to grass is almost like a
free ticket to heaven at this point. The CME feeder cattle index
5/21/2020: down $0.36, $126.24.
LEAN HOGS:
Coming
off Thursday's rally, the lean hog market closed in a disappointing
manner, as the market closed $0.57 to $1.37 lower. June lean hogs closed
$0.57 lower at $58.77, July lean hogs closed $1.27 lower at $55.90 and
August lean hogs closed $1.00 lower at $4.27. Packers opted to sit
Friday mostly out of the market as they head into the three-day weekend.
Cash hog prices were softer and only 4,694 head, which isn't much
considering it's a three-day weekend. Pork cutouts total 483.44 loads
with 458.14 loads of pork cuts and 25.29 loads of trim. Pork cutout
values: down $1.10, $96.75. Friday's slaughter is estimated at 380,000
head, 15,000 head more than a week ago and 24,000 head less than a year
ago. Saturday's slaughter is projected to be around 170,000 head. The
CME lean hog index 5/20/2020: down $1.39, $64.59.
TUESDAY'S
CASH HOG CALL: Steady. Cash prices will most likely continue to teeter
back and forth as packers manage needing more supplies and needing to
work through the hogs they have spoken for.
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| #completecalfcare |
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