LIVE CATTLE:
Open: 5
cents lower. August cattle are up 2 cents early Friday, continuing to
find support in the low to mid $90s, but not showing any interest yet to
trade higher. The 100-day average has served as firm resistance since
early May and is currently near $98. The good news for cattle of late
has been the return to former slaughter levels. USDA estimated
Thursday's cattle slaughter at 120,000, down just 1,000 from a year ago.
USDA will release its June 1 on-feed report at 2 p.m. CDT Friday. Dow
Jones' pre-report survey expects USDA to show 2.5% fewer placements in
May than a year ago and on-feed inventory 1% smaller than a year ago.
Cash trade has taken shape this week near $102 for live cattle and
around $158 to $162 for dressed trade -- both lower than last week.
Thursday's boxed beef trade saw choice prices drop to $213.56, down $17
from last Friday and back near pre-coronavirus levels. Selects finished
at $204.08, down $15 since Friday. Total open interest was up 735 at
273,758 on Thursday's lower trade. June contracts were down 740 to 5,693
and August was down 461 at 130,653.
FEEDER CATTLE:
Open:
47 cents lower. August feeder cattle are down 2 cents early Friday,
holding sideways in a narrow corrective pattern with support holding
near $128. The restoration of slaughter should help cattle movement down
the line, but there is also an issue of heavier weights and backed up
inventory possibly slowing demand at the feeder level. Technically
however, August feeders are showing good support and a close above $134,
if it happened could help trigger noncommercial buying. The Feeder Cash
index for June 17 is listed at $128.51, down $0.87 from a week ago.
Total open interest was up 509 at 33,618 on Thursday's lower trade.
August contracts were up 154 at 17,421.
LEAN HOGS:
Open:
37 cents higher. August hogs are up 5 cents early Friday in active
trading, finding light support after testing a new contract low earlier
this week. Should August hogs be able to finish the week above the old
April low of $51.90, it would be a strong vote of confidence that the
lows for this contract are in. December hogs are up 12 cents, but remain
over $5 above their April low as traders continue to anticipate a
smaller hog inventory in USDA's June 25 hogs and pigs report. USDA
estimated Thursday's hog slaughter at 460,000, down from 479,000 a year
ago as plants are finding it difficult to get back to pre-coronavirus
levels. Pork cutouts slipped to $65.01 on 487.48 loads Thursday, down
$4.98 since last Friday. Thursday's packer margin from Dow Jones was
estimated at $70.86 per head, positive incentive for packer buying where
processing capacity is available. The Lean Hog Index for June 17 was
posted at $46.44, down $3.55 from a week ago and roughly $3 below the
July futures contract. Total open interest was up 1,360 at 217,420 on
Thursday's mostly higher trade. Open interest in the July contract was
down 840 at 27,117 while August contracts were up 1,024 at 87,454.
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