GENERAL COMMENTS:
There's a lot of pressure and anxiousness heading into Thursday, as the market will be tested with sales and updated on important data. Feeder cattle enthusiasts are going to be watching the specialty sales, and hog producers are going to be watching just as closely for the quarterly hogs and pigs report. Hog prices closed lower on the National Direct Afternoon Hog Report down $0.16 with a weighted average of $28.50 on 7,146 head. July corn is down 3/4 cent per bushel and July soybean meal is up $0.40. The Dow Jones Industrial Average is down 710.16 points and NASDAQ is down 222.20 points.
LIVE CATTLE:
Live cattle contracts tried to rally through parts of the day, but the pressure of the backlog of cattle and the weakening cash market aided in the market's decision to scale lower. August live cattle closed $0.85 lower at $96.35, October live cattle closed $0.25 lower at $99.62 and December live cattle closed $0.17 lower at $103.35. A light to moderate trade developed in several area with Northern dressed deals at $155 to $156, mostly $156, which is just under $5 lower than last week's weighted average in Nebraska. Southern live business was at $95 to $97, mostly $97, $4 lower than last week's weighted averages. Wednesday's slaughter is estimated at 120,000 head, steady with a week ago and 3,000 head less than a year ago.
USDA's Crop Progress report released June 22 shared that only 43% of the nation's pasture/range conditions were in good-to-excellent condition, while at this time last year good-to-excellent pasture/range conditions were upwards of 68%. Not to mention that some states had alarmingly higher poor-to-very-poor pasture/range conditions: 48% in Colorado, 55% in California, 59% in New Mexico and 31% in Texas. With this being only the first official week of summer, states with dwindling pasture and range conditions could be forced to liquidate some livestock.
Boxed beef prices closed lower: choice down $2.12 ($209.69) and select down $1.88 ($201.69) with a movement of 196 loads (110.69 loads of choice cuts, 31.60 loads of select, 14.78 loads of trim and 38.62 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady to slightly lower. This week hasn't thrown the cash cattle market any favors, and as the midweek point has already been reached, the market will most likely continue to trade in its already established ranges.
FEEDER CATTLE:
As Wednesday closes and all eyes begin to look to Thursday, feeder cattle participants have Thursday's sales on their mind. Northern Livestock Video Auction will be selling roughly 16,600 head and Superior Livestock Auction will be selling 44,900 head. Feeder cattle contracts closed the day mixed as, after the noon hour, some pressure grew in the nearby contracts. August feeders closed $0.32 lower at $132.87, September feeders closed $0.30 lower at $134.17 and October feeders closed $0.25 lower at $135.17. From November 2020 into 2021 the complex was able to close higher, which makes sense as there's so much discrepancy on how prices are going to fare over the next couple of months.
At Hub City Livestock Auction in Aberdeen, South Dakota, compared to last week, the best test through Wednesday's action for steers was those weighing 850 to 950 pounds which sold $1.00 to $4.00 stronger. The best test on heifers was of those weighing 800 to 850 pounds, which sold $2.00 to $3.00 higher. The CME feeder cattle index 6/23/2020: up $0.41, $129.12.
LEAN HOGS:
The lean hog complex didn't close with hardly any optimism, but rather smoked an entire pack of Marlboro Man cigarettes when they saw that analysts' projections for hogs weighing 180 pounds and over ranged anywhere from 102.2% to 126.8%, with an average of 116.6% higher than a year ago. Not only is the wide range bothersome (which is largely attributed to not knowing how many hogs were euthanized during COVID-19 and not knowing how many market-ready hogs are on maintaining rations), but the simple fact that the average projection is a staggering 16.6% higher than a year ago means that the backlog of hogs we have known about is far greater than most assumed. Pork cutouts totaled 411.28 loads with 353.07 loads of pork cuts and 58.21 loads of trim. Pork cutout values: up $4.50, $67.78. Wednesday's slaughter is estimated at 468,000 head, 8,000 head more than a week ago and 5,000 head less than a year ago. The CME lean hog index 6/22/2020: up $0.11, $45.17.
THURSDAY'S CASH HOG CALL: Lower. With pressure building on the complex, everyone is going to want to know how Thursday's report fares.
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