GENERAL COMMENTS:
Livestock
contracts closed the week mostly lower, and with anticipation that on
the cattle side of things, prices are going to get cheaper before they
go higher. Hog prices closed lower on the National Direct Afternoon Hog
Report, down $0.83 with a weighted average of $32.14 on 5,626 head sold.
July corn is up 2 1/4 cents per bushel and July soybean meal is down
$0.70. The Dow Jones Industrial Average is up 829.16 points and NASDAQ
is up 198.27 points.
From Friday to Friday,
livestock futures scored the following changes: June live cattle down
$5.82, August live cattle down $3.43; August feeder cattle down $1.17,
September feeder cattle down $0.28; June lean hogs down $9.40, July lean
hogs down $3.10.
LIVE CATTLE:
Live
cattle contracts closed lower, near $2.00 lower in nearby contracts.
June live cattle closed $1.82 lower at $93.90, August live cattle closed
$1.75 lower at $96.17 and October live cattle closed $1.57 lower at
$99.30. The 40-day moving average ($93.54) sits closely with where the
markets closed this week, but the 100-day moving average sits at
$104.12, almost $10.00 higher than where the market is now. Friday was a
quiet day for the cash cattle market as the board veered lower and few
were interested in trading cattle. Some cattle in Texas traded for $100
to $110, and a private source shared that some cattle also traded
upwards of $114. Other than the trade in the South, the market was
extremely quiet.
Friday's slaughter is
estimated at 116,000 head, 5,000 head greater than a week ago and 3,000
head less than a year ago. Saturday's kill is projected to be around
63,000 head.
Boxed beef prices close lower:
choice down $10.78 ($261.48) and select down $13.99 ($246.42) with a
movement of 155 loads (101.08 loads of choice, 25.06 loads of select,
11.17 loads of trim and 18.02 loads of ground beef).
MONDAY'S
CASH CATTLE CALL: Lower. But the real question is how much lower? Will
the market teeter lower, taking a mere $2.00 next week, followed with
another $2.00 the following week? Or will the market take a sizeable
plunge lower as boxed beef prices correct and the board trends lower?
FEEDER CATTLE:
Feeder
cattle contracts struggled all throughout Friday and ultimately closed
substantially lower. August feeders closed $0.55 lower at $134.17,
September feeders closed $1.02 lower at $135.47 and October feeders
closed $1.20 lower at $136.07. The feeder cattle market is caught in a
tough spot as the countryside would like to see the market rally as
early summer sales are about to take place, but the live cattle market
is regressing, which is bringing the futures market lower along with it.
The South Dakota Weekly Cattle Auction Summary shared that, compared to
last week, feeder steers under 800 pounds sold $1.00 to $2.00 higher,
steers weighing over 800 pounds sold steady to $3.00 lower. Feeder
heifers were unevenly steady. Demand was moderate to good on steers and
heifers under 800 pounds, and only moderate on anything heavier. Big
strings of backgrounded yearlings continue to be offered at the auctions
throughout the state. Cattle feeders are apprehensive about pushing too
hard when trying to get cattle bought as the futures contracts aren't
supportive of higher feeder cattle prices. The CME feeder cattle index
6/4/2020: down $0.72, $127.93.
LEAN HOGS:
Lean
hog contracts trended lower throughout the week, but support came
Friday with gains well over $1.00 in most contracts. June lean hogs
closed $0.97 lower at $47.45, July lean hogs closed $0.35 higher at
$53.92 and August lean hogs closed $1.57 higher at $57.35. On a positive
note, hog slaughter has been avid about getting back to a year ago
levels and is on the brink of doing so. Although it will still take an
exuberant amount of time to get the backlog of hogs processed, its
positive that the industry won't be adding to the backlog here shortly.
Pork
cutouts total 442.03 loads with 414.32 loads of pork cuts and 27.71
loads of trim. Pork cutout values: down $2.07, $72.78. Friday's
slaughter is estimated at 438,000 head, 19,000 head greater than a week
ago and 30,000 head less than a year ago. Saturday's kill is projected
to be around 323,000 head. The CME lean hog index 6/3/2020: down $1.68,
$55.38.
MONDAY'S CASH HOG CALL: Lower.
Packers don't have to work hard at getting the hogs they need, and until
the market is current, steady to lower trends will most likely be the
case.
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