GENERAL COMMENTS:
It was a touch and go week for the livestock complex as the market must manage both technical and fundamental influences extremely close in Friday's market. Thankfully, both beef and pork demand continue to run wild and before Friday's close, traders upped their ante and the contracts closed higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.99 with a weighted average of $106.80 on 3,596 head. July corn is down 5 cents per bushel and July soybean meal is down $2.20. The Dow Jones Industrial Average is up 123.69 points and NASDAQ is down 64.75 points.
From Friday to Friday livestock futures scored the following changes: June live cattle up $2.38, August live cattle up $2.10; May feeder cattle down $0.33, August feeder cattle up $2.55; June lean hogs up $5.50, July lean hogs up $7.55.
LIVE CATTLE:
The live cattle market rounded out the week fully higher amid a bullish Cattle on Feed report and strong boxed beef prices. Not surprising at all is the fact that the market's broken component continues to be the cash cattle market. While boxed beef prices soar, the cash cattle market was left to trade mostly steady and traded very few cattle again this past week. There wasn't enough cash cattle traded Friday afternoon to even mention, but throughout the week, Southern live cattle sold for $118 to $120 (steady to $1.00 higher than last week) and Northern dressed cattle traded for $188 to $193, which was steady to $1.00 lower than last week. June live cattle closed $1.07 higher at $117.67, August live cattle closed $1.05 higher at $120.92 and October live cattle closed $0.70 higher at $125.05. Friday's slaughter is estimated at 119,000 head, 4,000 head more than a week ago. Saturday's slaughter is estimated at 78,000 head, 16,000 head more than a week ago.
Boxed beef prices averaged higher yet again throughout the week and closed above $3.00 per pound in both choice and select cuts on Thursday and Friday afternoon. Throughout the week, choice cuts averaged $323.14 (up $9.08 from last week) and select cuts averaged $299.91 (up $4.64 from last week) and the week's total movement of cuts, grinds and trim only totaled a scant 459 loads.
Friday's Cattle on Feed report was actually quite bullish when you compare 2021's data to that of 2019. Click on the link provided to see DTN's COF comments and to access the full report:
Boxed beef prices closed higher: choice up $0.99 ($325.17) and select up $0.70 ($302.31) with a movement of 67 loads (32.52 loads of choice, 14.32 loads of select, 13.25 loads of trim and 7.01 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Packers seem to be making ungodly amounts of money in today's current market and it's not likely that they'll start to support the cash market and risk giving up some margin.
FEEDER CATTLE:
As the corn market rounded out the day lower, the feeder cattle contracts were given the opportunity to trade $1.00 to $2.00 higher before Friday's close. August feeders gained enough momentum that the contract closed above both the 40- and 100-day moving averages. August feeders closed $2.62 higher at $153.70, September feeders closed $2.35 higher at $154.90 and October feeders closed $1.97 higher at $155.70. The Oklahoma Weekly Cattle Auction summary shared that, compared to last week, feeder steers and heifers sold mostly steady to $1.00 higher. Steer calves traded steady to $4.00 lower, and heifer calves sold $1.00 to $3.00 higher. Slaughter cows sold steady to $2.00 lower and slaughter bull sold $1.00 to $3.00 higher. Of all the slaughter cows sold 68% went to packers. The CME Feeder Cattle Index for May 20: up $1.34, $135.20.
LEAN HOGS:
The cash market did indeed close lower (and sharply lower as a matter of fact), but traders didn't seem to mind as the market closed fully higher feeling completely supported by strong consumer demand. June lean hogs closed $1.97 higher at $114.22, July lean hogs closed $3.00 higher at $116.55 and August lean hogs closed $2.70 higher at $112.02. Looking to next week's trade, the market will once again be skeptical of making any higher technical advancements until traders see confidence in followed through buying from consumers. Pork cutouts totaled 335.31 loads with 302.73 loads of pork cuts and 32.57 loads of trim. Pork cutout values: up $1.64, $120.86. Friday's slaughter is estimated at 463,000 head - 2,000 head more than a week ago. Saturday's slaughter is projected to be around 32,000 head, 18,000 head more than a week ago. The CME Lean Hog Index for May 19: down $0.18, $111.44.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. Friday's cash hog market closed sharply lower and, looking at the recent weeks past, packers haven't been overly aggressive in their purchases on Monday. If the week trends as it has been, packers could wait until Tuesday or Wednesday to really support the market.
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