GENERAL COMMENTS:
As the week looks to round the midway point and head towards the later part of the week, contracts have traded mostly lower thus far, although cattle contracts were able to close higher Wednesday afternoon. With boxed beef prices continuing to weaken at an exponential rate, weakness may be how the week ends too. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.77 with a weighted average of $33.96 on $7,827 head. July corn is down 1/4 cent per bushel and July soybean meal is up $2.60. The Dow Jones Industrial Average is up 527.24 points and NASDAQ is up 74.53 points.
LIVE CATTLE:
Live cattle contracts had a mostly uneventful day as the complex closed mostly higher other than in a couple deferred contracts. June live cattle closed $0.15 higher at $95.45, August live cattle closed $1.15 higher at $97.35 and October live cattle closed $0.55 higher at $99.97. Another round of light trade transpired Wednesday afternoon in both the North and South. Southern live cattle sold for $117, which is steady with last week's trade but $1.00 lower than Monday's trade. Northern cattle sold dressed for $185, which was steady with last week. Wednesday's slaughter is estimated at 114,000 head, 4,000 head more than a week ago and 6,000 head less than a year ago.
Boxed beef prices closed lower: choice down $22.83 ($295.90) and select down $13.80 ($276.78) with a movement of 141 loads (76.65 loads of choice, 24.91 loads of select, 18.89 loads of trim and 20.55 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Slightly lower. As boxed beef prices jump lower, the cash market is bound to follow. The question is how will it follow: Will it be in major moves that take $5.00 chunks out of the market at a time or will it trade on the lower end of the previous week's weighted average, week after week, so that the decline isn't as hasty? Time will tell. As packer's margins dwindle due to boxed beef prices correcting, how cash cattle are bid in the next two weeks will be insightful as to how the market will ease into summer.
FEEDER CATTLE:
Feeder cattle contracts closed $0.77 to $0.90 higher all throughout the complex. August feeder cattle closed $0.80 higher at $134.22, September feeders closed $0.87 higher at $135.77 and October feeders closed $0.90 higher at $136.57. At Wednesday's close the stronger month is the November contract, which closed at $137.05. At Winter Livestock in Dodge City, Kansas, compared to last week, feeder steers weighing above 800 pounds sold steady to $2.00 higher and 600- to 650-pound steers sold steady. All other feeder steer weights were not accurately tested, though lower undertones were noted. Feeder heifers weighing 450 to 700 pounds sold $1.00 to $2.00 lower while heifers weighing more than 700 pounds sold steady to $3.00 stronger. The CME feeder cattle index 6/2/2020: up $0.40, $128.65.
LEAN HOGS:
The lean hog complex fought some major pressure in nearby contracts but was able to close fully higher in deferred contracts. June lean hogs closed $3.75 lower at $48.65, July lean hogs closed $1.40 lower at $53.47 and August lean hogs closed $0.65 lower at $54.90. Working through the backlog of hogs is a blessing but adds immense pressure to the current market, and not knowing if China is going to support U.S. agriculture products in the upcoming weeks and months adds even more nearby uncertainty. Pork cutouts total 505.83 loads with 461.02 loads of pork cuts and 44.81 loads of trim. Pork cutout values: up $0.64, $75.01. Wednesday's slaughter is estimated at 429,000 head, up 8,000 head from a week ago and 47,000 head less than a year ago. The CME lean hog index 6/1/2020: down $0.73, $59.23.
THURSDAY'S CASH HOG CALL: Lower. The backlog of hogs is seeming like a never-ending curse to the lean hog market as producers are overwhelmed with the number of hogs they need to market.
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