General Comments
As
the market inches closer and closer to the midday mark the complex is
left trying to balance its position while getting mixed signals
throughout the day. The lean hog complex came out strong willing and
ready to rally throughout the day but as time has advanced the market is
scaling lower. Cattle contracts; on the other hand, have fought
resistance throughout the day but are starting to simply submit as the
pressure in the live cattle complex is seeming too much to take on for
Friday. July corn is up 2 1/4 cents per bushel and July soybean meal is
down $1.10. The Dow Jones Industrial Average is down 209.54 points and
NASDAQ is down 45.04 points. Friday.
LIVE CATTLE
Live
cattle contracts awakened to Friday's bell cautious in nature knowing
that pressure from aggressive slaughter which is whittling on boxed beef
prices mixed with the backlog of cattle is enough to suppress the
market. But midmorning the complex tried to rally but was quick to fall
back to lower price which is where the market remains at noon. August
live cattle are down $0.52 at $95.57, October live cattle are down $0.40
at $99.00 and December live cattle are down $0.20 at $103.07. It's
looking like the majority of cash cattle trade could be done for the
week and whatever trickles in this afternoon will mostly just be
clean-up trade. Thus far in the day there have been no bids renewed.
Asking prices for cattle left on showlists are around $105 in the South
and $165 to $170 in the North.
Before
everyone checks out for the weekend, the last thing left on everyone's
mind is the unveiling of the latest Cattle on Feed Report. Placements
and cattle/calves on feed are projected to be similar figures of last
year, but the marketings category is where COVID-19; once again,
affected the market. Projections for the number of cattle marketed in
May are anywhere from 72.7% to 76.8% of what they were a year ago.
Boxed
beef prices are mixed: choice up $0.77 ($214.33) and select down $0.23
($203.85) with a movement of 117 loads (68.58 loads of choice, 17.94
loads of select, 10.20 loads of trim and 20.21 loads of ground beef).
FEEDER CATTLE
Feeder
cattle contracts would love to trade higher but the cost of sticking
their necks out on the line while the live cattle market continues to
trade indecisively could be too costly. Earlier in the day the feeder
cattle contracts seemed likely to trade higher while the live cattle
complex traded mildly lower but as time has worked through the day, the
pressure has seeped into the heart of both markets. August feeders are
down $0.32 at $132.65, September feeders are down $0.35 at $133.90 and
October feeders are down $0.30 at $134.80. Deferred contracts are more
optimistic and are trading somewhat higher.
LEAN HOGS
The
lean hog market is trying to keep some of the market elevated as the
complex was bold and trading higher early Friday morning but as the day
progresses pressure to close out the week and head for the weekend
builds. July lean hogs are down $0.92 at $48.97, August lean hogs are up
$0.17 at $53.65 and October lean hogs are up $0.27 at $51.45. At midday
cutout values are considerably, which may be enough to pull for a
higher cutout close Friday afternoon.
The
projected lean hog index for 6/18/2020 is down $0.83 at $45.61 and the
actual index for 6/17/2020 is down $0.93 at $46.44. Hog prices are lower
on then National Direct Morning Hog Report, down $0.02 with a weighted
average of $28.51, ranging from $24.00 to $29.98 on 4,885 head and a
five-day rolling average of $28.93. Pork cutouts total 262.26 loads with
238.86 loads of pork cuts and 23.40 loads of trim. Pork cutout values:
up $2.59, $67.60.
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