General Comments
Wednesday may have started the day off lower but has since rallied most of the livestock complex and heads into Wednesday's noon hour optimistically. After the Fed Cattle Exchange some cash cattle trade stared to develop just slightly lower compared to Monday's initial trade. July corn is down 1 cent per bushel and July soybean meal is up $1.20. The Dow Jones Industrial Average is up 379.87 points and NASDAQ is up 37.91 points.
LIVE CATTLE
Live cattle contracts have absorbed some of the industry's excitement and are now trading modestly higher. June live cattle are up $0.17 at $95.47, August live cattle are up $0.90 at $97.10 and October live cattle are up $0.32 at $99.77. After the Fed Cattle Exchange a light round of trade started to develop throughout most areas. Southern live cattle are trading mostly at $117, which is $1.00 lower than Monday's trade but mostly steady with last week's weighted average. Northern dressed cattle are trading mostly at $185, which is fully steady with last week.
The Fed Cattle Exchange Auction listed a total of 1,736 head, with 199 head actually sold, 1,537 head listed as unsold, and zero head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 1,104 total head, with no sales; NE 284 total head, with no sales; TX 348 total head, with 199 head sold at $110.50, 149 head were unsold. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 739 head total, no sales; 1-17 day delivery 997 head total, 199 head sold, with a weighted average price of $110.50.
It's strange that the August live cattle contract is trading higher than June live cattle contract considering that August is a tough month for cash cattle prices, the days are hotter and harder on cattle feeders and the industry is expecting and exuberant amount of fat cattle to be around still at that time.
Boxed beef prices are lower: choice down $18.72 ($300.01) and select down $10.92 ($279.66) with a movement of 69 loads (39.03 loads of choice, 14.45 loads of select, zero loads of trim and 15.55 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts may have started the day out lower but are nearing the noon hour fully higher. August feeders are up $0.47 at $133.90, September feeders are up $0.52 at $135.42 and October feeders are up $0.52 at $136.20. The country will continue to sell feeder cattle with gusto and excitement as buyers have been interested and willing to pay respectable prices for those cattle. The hiccup that could shake the feeder cattle market is if when cash cattle prices start to pull back that they do so abruptly.
LEAN HOGS
The lean hog market is ready to trade higher and is in deferred contracts but pressure from lower cutouts and uncertainty surrounding China and their willingness to buy pork remains bothersome for nearby contracts. June lean hogs are down $2.30 at $50.10, July lean hogs are down $0.65 at $54.22 and August lean hogs are up $0.02 at $55.57. Tuesday's closing pork cutouts totaled an enormous 571.70 loads, and with Wednesday already posting 305.79 loads, it could be another massive day for pork cutouts.
The projected lean hog index for 6/2/2020 is down $2.17 at $57.06 and the actual index for 6/1/2020 is down $0.73 at $59.23. Hog prices are lower on the National Direct Morning Hog Report, down $1.25 with a weighted average of $33.48, ranging from $28.00 to $37.00 on 5,312 head and a five-day rolling average of $35.29. Pork cutouts total 305.79 loads with 273.79 loads of pork cuts and 32.00 loads of trim. Pork cutout values: down $0.27, $74.10.
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