GENERAL COMMENTS:
The corn market's rally came at a rather large expense to the cattle contracts, and the market's lower morale even soaked into the lean hog contracts before closing. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.42 with a weighted average of $107.30 on 6,010 head. May corn is up 25 cents per bushel and July soybean meal is up $9.20. The Dow Jones Industrial Average is down 321.41 points and NASDAQ is down 131.81 points.
LIVE CATTLE:
As if the runaway-train type of corn prices weren't bad enough for the cattle market's morale, feedlots now have to also deal with the long-lasting affects of cattle sold with time as there were some pens sold Thursday afternoon for delivery the week of May 10 -- three weeks away. I'd love to say that high corn prices mean high cattle prices, but in 2021 that just isn't the reality of the marketplace. Packers have worked this market from every angle and, as supplies of market-ready cattle become thinner and thinner moving forward, they have prepared themselves for a time like this and are buying cattle with time to avoid paying higher prices later down the road. There was a light trade of cattle that developed in the North for $192, which is $4.00 lower than last week's business and where most of the delayed delivery for May 10 was done. Some cattle sold in Colorado for $121, which is $1.50 lower than last week's average. Bids of $118 are still being offered in Kansas but the Southern Plain feedlots were mostly quiet throughout the day with just a few cattle trading at $118 to $119. April live cattle closed $1.45 lower at $118.32, June live cattle closed $1.40 lower at $115.85 and August live cattle closed $1.25 lower at $116.72. Thursday's slaughter is estimated at 118,000 head, 4,000 head more than a week ago and 36,000 head more than a year ago (year-ago numbers were greatly affected by COVID-19).
Thursday's actual slaughter data shared that, for the week ending April 10, steer carcass weights jumped 6 pounds to average 900 pounds, and heifer carcass weights averaged 829 pounds, down 3 pounds from the previous report.
Thursday's Cold Storage Report shared that total red meat supplies in freezers were down 6% from the previous month and down 17% from last year. Total pounds of beef in freezers were down 6% from last month and down 4% from last year.
Boxed beef prices closed higher: choice up $1.85 ($282.31) and select up $1.81 ($273.69) with a movement of 93 loads (54.03 loads of choice, 18.97 loads of select, 6.25 loads of trim and 13.40 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady to somewhat lower. Even though the week's slaughter pace is encouraging, and boxed beef prices are stronger, the trends of the cash cattle market are lower this week and enough cattle have sold to where packers know they can demand these lower prices.
FEEDER CATTLE:
Wrapping up Thursday's gruesome trade, the feeder cattle contracts did only what they could amid a $0.25 rally in the nearby corn contracts, and amid a cash cattle market that's sinking quicker than quicksand -- they closed sharply lower. At some point, one would think that high prices have got to cure high prices in the corn market, but the damage done between then and now is costly to livestock producers. May feeders closed $2.57 lower at $137.02, August feeders closed $3.55 lower at $148.37 and September feeders closed $3.52 lower at $150.40. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, feeder steers weighing 800 to 850 pounds sold $7.00 lower, steers weighing 900 to 950 pounds sold steady, and steers weighing 1,000 to 1,150 pounds sold $3.00 to $7.00 lower. Feeder heifers weighing 750 to 800 pounds sold $9.00 lower and heifers weighing 800 to 1,000 pounds sold $4.00 to $6.00 lower. The CME Feeder Cattle Index for April 21: down $0.80, $137.53.
LEAN HOGS:
Even though the futures market absorbed the day's technical pressures, the market's fundamentals are still incredibly strong. Pork cutouts closed higher, and the cash market even closed higher. After trading higher both Monday and Tuesday, the contracts rebound from last week's hard sell out to now be at levels where resistance pressure is limiting the futures market again. Even though the day closed lower in the nearby contracts, the fact remains that demand is exceptional, and supplies are thin -- extremely thin. June lean hogs closed $0.97 lower at $103.55, July lean hogs closed $0.75 lower at $102.25 and August lean hogs closed $0.40 lower at $98.92. Pork cutouts total 346.68 loads with 306.32 loads of pork cuts and 40.37 loads of trim. Pork cutout values: up $1.06, 114.70. Thursday's slaughter is estimated at 481,000 head, 7,000 head more than a week ago and 119,000 head more than a year ago (year-ago numbers were greatly affected by COVID-19). The CME Lean Hog Index for April 20: up $0.70, $105.12.
Thursday's actual slaughter data shared that for the week ending April 10, pork live and dressed weights were higher for hogs. Live carcass weights averaged 292 pounds (up 2 pounds from the previous report) and dressed carcass weights averaged 218 pounds (up 1 pound).
Thursday's Cold Storage Report shared that frozen pork supplies were down 7% from last month and down 27% from last year and stocks of pork bellies were down 6% from last month and down 55% from last year.
FRIDAY'S CASH HOG CALL: Steady. Even though packers have shown that they are going to work the cash cattle market vigorously as supplies are extremely hard to come by and demand is strong, packers may be a little less aggressive heading into the weekend.
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