GENERAL COMMENTS:
The industry is starting to feel the market begin its correction. There's no doubt that cattlemen and traders hope to see the market turn to a more stable environment, but the roller-coaster ride getting there is going to be harsh and volatile. Hog prices close higher on the National Direct Afternoon Hog Report, up $0.18 with a weighted average of $37.05 on 7,136 head. July corn is down 3/4 cent per bushel and July soybean meal is steady. The Dow Jones Industrial Average is up 377.37 points and NASDAQ is up 80.55 points.
LIVE CATTLE:
Live cattle contracts fell lower as the board's depressed demeanor and lowering boxed beef prices weigh heavily on the market. June live cattle closed $0.25 higher at $94.12, August live cattle closed $1.42 lower at $97.00 and October live cattle sold $1.55 lower at $99.95. Thursday was mostly uneventful in the cash market as packers let the day sit idle and simply pass by. Tuesday and Wednesday were fairly active for cash cattle, so packers may buy some more for Friday, but it could be also be pretty quiet again throughout the countryside. Thursday's slaughter is estimated at 92,000 head, 6,000 head more than a week ago and 30,000 head less than a year ago.
Boxed beef prices closed sharply lower: choice down $15.07 ($450.92) and select down $0.16 ($437.40) with a movement of 104 loads (60.60 loads of choice, 14.72 loads of select, 12.69 loads of trim and 16.19 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. This week packers will most likely continue to pay steady prices with what cattle have been trading for, but as time progresses and their margins start to dwindle due to the correction in boxed beef prices, sadly the cash market will suffer as packers have cattle available left and right to process.
FEEDER CATTLE:
Feeder cattle contracts felt Thursday's pressure, as the whole complex fell at least $1.50 lower if not more. May feeders fell $1.50 to $123.80, August feeders fell $2.02 lower to $131.05 and September feeders fell $1.85 lower to $132.52. At Napoleon Livestock Auction in Napoleon, North Dakota, compared to two weeks ago, steers weighing 550 pounds and higher sold $5.00 to $8.00 higher with stances up to $12.00 higher. Not all weights were well tested, but of the groups that were comparable, that's how the averages fell. Cattle were in lighter flesh, which helped buyers be more interested in the calves as they look to put them out on summer grass. Grass will start to become sparse throughout the country as feedlots are pressured for space from the backlog of fat cattle and some feeders are hesitant about buying feeder calves all together. The CME feeder cattle index for 5/13/2020: not available at this time.
LEAN HOGS:
The lean hog market wasn't able to skate by without the board's pressure to trade lower. Some of the nearby contracts traded higher, along with some deferred contracts, but for the most part, the complex closed lower. June lean hogs closed $0.87 higher at $58.75, July lean hogs closed $0.32 lower at $58.80 and August lean hogs closed $0.52 lower at $57.72. Pork cutouts total 377.98 loads with 340.91 loads of pork cuts and 37.07 loads of trim. Pork cutout values: down $3.42, $113.79. Thursday's slaughter is estimated at 372,000 head, 43,000 head more than a week ago and 90,000 head less than a year ago. The CME lean hog index 5/12/2020: up $2.17, $67.89.
FRIDAY'S CASH HOG CALL: Steady. With cutout values scaling lower, and packers increasing their production, cash prices will be pressured as packers begin to work through the backlog of supply.
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