GENERAL COMMENTS:
Heading
into the weekend, the lean hog complex and feeder cattle contracts hope
next week is a positive one with strong feeder cattle sales and a
bullish hogs and pigs report. However, the live cattle complex knows
better than to wish for anything too good. Hog prices closed lower on
the National Direct Afternoon Hog Report, down $0.05 with a weighted
average of $28.48 on 6,188 head. July corn is up 1 1/2 cents per bushel
and July soybean meal is down $1.80. The Dow Jones Industrial Average is
down 208.64 points and NASDAQ is up 3.07 points.
From
Friday to Friday: Livestock futures scored the following changes: June
live cattle down $1.38, August live cattle up $0.08; August feeder
cattle up $1.45, September feeder cattle up $1.40; July lean hogs down
$3.22, August lean hogs down $1.85.
LIVE CATTLE:
It's
going to be a long, long summer for the live cattle market. Contracts
struggled this week as the market tempted to trade higher a couple of
times, but ultimately knew that the burdensome backlog of fed cattle was
going to weigh the market down. With boxed beef prices dropping lower
and lower, packers are going to get more stingy in their bids. Nearby
contracts closed lower while deferred contracts closed modestly higher.
August live cattle closed $0.70 lower at $95.40, October live cattle
closed $0.55 lower at $98.85 and December live cattle closed $0.42 lower
at $102.85. Friday's cash cattle trade was quiet with just a few
scattered deals here and there. This week Southern live cattle trade
ranged from $98 to $102 (steady to $3.00 lower) and Northern dressed
cattle sold for $157 to $167 ($3.00 to $5.00 lower) with prices scaling
lower as the week progressed. Friday's slaughter is estimated at 119,000
head, 4,000 head more than a week ago and steady with a year ago.
Saturday's slaughter is expected to be 59,000 head.
Friday's
Cattle on Feed reported that cattle/calves on feed listed 11.7 million
head, slightly below June 2019. Placements in May totaled 2.04. million
head, 1% smaller than last year, Marketings in May totaled 1.50 million
head, 28% less than the prior year; other disappearance in May totaled
66,000 head, 8% under the same time last year. Unfortunately, the number
of fed cattle marketed was the lowest number in May since the report
began in 1996 -- a chilling 24 years ago.
Boxed
beef prices closed mixed: choice up $0.16 ($213.72) and select down
$0.17 ($203.91) with a movement of 167 loads (96.18 loads of choice,
24.38 loads of select, 11.25 loads of trim and 35.31 loads of ground
beef).
MONDAY'S CASH CATTLE CALL: Lower. As
Friday's Cattle on Feed Report vividly reminded us, there's a lot of fed
cattle scattered throughout the countryside that need slaughtered. With
extra supply comes weaker prices.
FEEDER CATTLE:
Feeder
cattle contracts tried gambling earlier Friday morning but soon saw
that the weakness in the live cattle contracts was only growing more and
more apparent, and although the countryside sold feeders exceptionally
well this week, the board is leery. August feeders closed $0.42 lower at
$132.55, September feeders closed $0.37 lower at $133.87 and October
feeders closed $0.25 lower at $134.85.
Heading
into next week, feeder cattle prices are going to be put to the test.
As three of the country's biggest auctions host their early summer
feeder cattle specials, cattlemen are going to be on the edges of their
seats trying to get a feel for this year's market. Western Video Market
has their Reno Sale on June 25. Superior Livestock hosts their Big Sky
Round Up Sale June 25 as well, with an offering of 44,900 head. Northern
Livestock Auction host their Early Summer Special sale on June 25,
selling over 16,600 head.
The USDA Oklahoma
Weekly Cattle Auction Summary shared that, compared to last week, feeder
steers sold steady to $7.00 higher and feeder heifers sold steady to
$5.00 higher. Calves were only lightly tested, but steer calves were
called steady to $5.00 higher, while heifer calves were steady to $4.00
lower throughout the state. Demand was moderate to good for feeder
cattle and just moderate for calves. Slaughter cows and bulls sold
steady to $2.00 lower. Like many other places throughout the U.S., rain
in needed all throughout the state. The CME feeder cattle index
6/18/2020: down $0.50, $128.01.
LEAN HOGS:
The
lean hog contracts tried to rally earlier in the day but ultimately
yielded to the market's pressure and closed lower. July lean hogs closed
$1.45 lower at $48.45, August lean hogs closed $0.67 lower at $52.80
and October lean hogs closed $0.32 lower at $50.85. Heading into next
week, pork producers are going to anxious for Thursday's quarterly hogs
and pigs report, which has the potential to greatly affect the market as
it will have insight into our nation's herd since COVID-19 affected
producers. Pork cutouts total 383.42 loads with 349.86 loads of pork
cuts and 33.56 loads of trim. Pork cutout values: down $0.37, $64.64.
Friday's slaughter is estimated at 457,000 head, 25,000 head more than a
week ago and 1,000 head less than a year ago. Saturday's slaughter is
projected to be 290,000 head. The CME lean hog index 6/17/2020: down
$0.93, $46.44.
MONDAY'S CASH HOG CALL: Lower. The exuberant supply will continue to burden the cash market next week.
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