GENERAL COMMENTS:
The midweek point didn't serve the livestock industry well, as all three contracts closed lower and the cash cattle market went lower as well. Producers know that the summer is usually a tough time for live cattle prices as supply overweighs demand and cash cattle prices have historically gotten softer throughout the season. Add this typical behavior with the chaos COVID-19 continues to create and the livestock industry isn't left feeling too warm and giddy about summer. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.60 with a weighted average of $30.16 on 6,527 head. July corn is down 1 1/4 cents per bushel and July soybean meal is up $1.70. The Dow Jones Industrial Average is down 282.31 points and NASDAQ is up 66.60 points.
LIVE CATTLE:
Live cattle contracts followed the rest of the livestock contracts to close Wednesday lower. June live cattle closed just slightly higher at, up $0.27 at $96.60, August live cattle closed $1.30 lower at $96.50 and October live cattle closed $1.17 lower at $99.40. We knew that this week's cash cattle trade had the potential to be significantly lower, and as Wednesday progressed the cash market regressed. There was a light trade in the North at most $172, $8.00 lower than last week's weighted average in Nebraska. A light trade was also reported in the South at $108, $4.00 lower than last week's weighted average. Wednesday's slaughter is estimated at 116,000 head, 2,000 head more than a week ago and 7,000 head less than a year ago.
Boxed beef prices closed lower: choice down $10.94 ($236.06) and select down $5.11 ($222.84) with a movement of 256 loads (145.23 loads of choice cuts, 47.11 loads of select, 16.46 loads of trim and 47.44 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. The market is expected to continue to drop lower, but that doesn't necessarily mean that it will all happen this week. Seeing that packers have only bought a light run of cattle this week could indicated that they aren't planning to buy much this week, seeing that they were extremely aggressive over the last two weeks, or that they are just waiting, letting time pass, and are going to drop the market lower as they see boxed beef prices continuing to dwindle.
FEEDER CATTLE:
Feeder cattle contracts closed over $1.00 lower in nearby contracts while closing just shy of $1.00 lower in deferred contracts. August feeders closed $1.57 lower at $132.67, September feeders closed $1.40 lower at $134.15 and October feeders closed $1.22 lower at $134.80. At Winter Livestock in Dodge City, Kansas, compared to last week, feeder steers over 800 pounds sold steady to $3.00 higher, while feeder heifers over 750 pounds sold steady to $2.00 lower. Slaughter cows sold steady to $1.00 higher, with instances $2.00 to $3.00 higher on fleshier cows, while slaughter bulls were not well tested on Wednesday's market. The CME feeder cattle index for 6/9/2020: up $0.18, $129.70.
LEAN HOGS:
Lean hog contracts closed like the rest of the livestock complex -- lower. July lean hogs closed $0.17 lower at $52.80, August lean hogs closed $0.97 lower at $55.82 and October lean hogs closed $1.40 lower at $53.50. Nearby contracts suffered some minor losses, but it was the deferred contracts that suffered the most -- seeing losses of $2.40 in the April 2021 contract. The market continues to plunge lower from the 100-day moving average of $57.81, just shy of being sold $10.00 lower. Pork cutouts totaled 499.34 loads with 465.89 loads of pork cuts and 33.45 loads of trim. Pork cutout values: down $0.42, $68.84. Wednesday's slaughter is estimated at 450,000 head, 21,000 head more than a week ago and 32,000 head less than year ago. The CME lean hog index 6/8/2020: down $0.16, $51.77.
THURSDAY'S CASH HOG CALL: Lower. Don't shoot the messenger, it's just the simple fact that an overabundance of supply continues to pressure the market.
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