GENERAL COMMENTS:
Lean hog futures have rallied confidently Friday as consumers are showing excellent support for pork products. Meanwhile, cattle futures enjoy some of support, but largely the market needs to see stronger slaughter speeds and a supported cash cattle market before it can get really excited. July corn is down 1 1/2 cents per bushel and July soybean meal is down $0.60. The Dow Jones Industrial Average is up 168.91 points and NASDAQ is down 41.40 points.
LIVE CATTLE:
The most aggravating component of this week's trade (and really the last entire year's trade) is that the cash cattle market isn't getting the attention it needs. The nearby live cattle contracts are trading higher, boxed beef prices are above $3.00/pound in both the choice and select cuts and yet feedlots are sitting on cattle that they can't get moved. It's utterly maddening. June live cattle are up $0.47 at $117.07, August live cattle are up $0.42 at $120.30 and October live cattle are up $0.05 at $124.40. The cash cattle market hasn't seen a speck of interest develop and, unless something happens in the next couple of hours, it's looking like this week's movement is going to be rather light again. Southern live deals have had a range of $118 to $120 and it looks like the bulk has come in at $119, which is fully steady with last week's weighted averages. Northern dressed deals have had a full range of $189 to $193, mostly $191, also fully steady with last week's weighted average basis Nebraska.
Seeing that Friday's morning boxed beef report only had a movement of 35 loads is troubling. But if we remember back to a week ago, it was at this time rumors started to stir that a couple of plants were planning dark Saturdays in the week ahead. As some packers prep for a dark weekend, their Friday ambitions are likely to be less as well.
Boxed beef prices are higher: choice up $1.74 ($325.92) and select up $1.55 ($303.16) with a movement of 35 loads (16.81 loads of choice, 7.62 loads of select, 6.22 loads of trim and 4.82 loads of ground beef).
FEEDER CATTLE:
Thursday's weaker close is allowing feeder cattle contracts to trade higher as the market is now back below the 40- and 100-day moving averages in the August contract and the market doesn't face immediate resistance pressure. August feeders are up $0.65 at $151.72, September feeders are up $0.45 at $153.00 and October feeders are up $0.35 at $154.07. Unfortunately, without strong advancements in the cash cattle market, the feeder cattle contracts are having to rely on a weaker corn complex to find opportunities to rally as the cash cattle market can't seem to gain any momentum.
LEAN HOGS:
The confidence stemming from stronger pork cutout values is helping move the lean hog complex higher into Friday afternoon trade. June lean hogs are up $1.50 at $113.77, July lean hogs are up $2.90 at $116.47 and August lean hogs are up $2.25 at $111.57. The market stands a good chance at closing higher before heading into the weekend. But, again, the market will be challenged next week as traders will need to see follow-through buying support from consumers before they rally the board.
The projected CME Lean Hog Index for 5/20/2021 is up $0.02 at $111.43 and the actual index for 5/19/2021 is down $0.19 at $111.41. Hog prices are lower on the National Direct Morning Hog Report, down $0.72 with a weighted average of $105.80, ranging from $101.68 to $116.00 on 2,660 head and a five-day rolling average of $107.02. Pork cutouts total 229.24 loads with 211.02 loads of pork cuts and 18.22 loads of trim. Pork cutout values: up $3.03, $122.25.
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