GENERAL COMMENTS:
Thursday rounded out the day with strong gains seen in the hog market, but distressing realizations were meant to be drawn in the cattle market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.06 with a weighted average of $109.79 on 7,256 head. July corn is up 6 1/4 cents per bushel and July soybean meal is down $2.10. The Dow Jones Industrial Average is up 188.11 points and NASDAQ is up 236.00 points.
LIVE CATTLE:
If you look at the live cattle market, it doesn't take long to realize that the beef industry is a disastrous situation. And yes, I truly mean a disastrous, dire situation. With the onset of slower processing speeds, showlists are growing larger, cattle are gaining weight when historically they'd be losing weight, and the cash cattle market has only a sparse amount of time left until boxed beef prices tip lower and packers begin to pay even less than they are now.
For only the second time in history (second to the madness seen in 2020), Thursday's afternoon boxed beef prices made history as select cuts closed above $3.00 per pound. And while beef consumers are being charged historic meat prices, American feedlots are left begging for bids. Thursday's cash cattle trade was another showing of measly trade as just a few head sold here and there, and the week's total movement remains thin. So far throughout the week, Southern live cattle have traded for $118 to $120, which is steady to $1.00 higher than last week. Northern dressed cattle have sold for $189 to $193, but mostly $190 to $191, which is steady to $1.00 lower. June live cattle closed $0.30 lower at $116.60, August live cattle closed $0.25 lower at $119.87 and October live cattle closed $0.27 lower at $124.35. Thursday's slaughter is estimated at 119,000 head, 4,000 head more than a week ago.
Thursday's actual slaughter data shared that, for the week ending May 8, both steer and heifer weighers were up slightly. Steers averaged 896 pounds which is 5 pounds more from the previous week, and heifers averaged 826 pounds, which is 2 pounds more.
Beef net sales of 56,900 mt report for 2021 -- a marketing-year high -- were up noticeably from the previous week and from the prior four-week average. The three largest buyers were Netherlands (33,700 mt), China (9,200 mt) and Japan (5,900 mt).
Boxed beef prices closed higher: choice up $0.80 ($324.18) and select up $1.92 ($301.61) with a movement of 70 loads (34.35 loads of choice, 16.53 loads of select, 9.52 loads of trim and 9.69 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. At this point, the week's prices are set. What the market desperately needs to see is a strong movement of cattle sold by Friday's afternoon close or this week's movement will be slim following last week's limited trade.
FEEDER CATTLE:
The pressure of taking on an unpredictable corn market amid drought conditions and looking the market's 40-day moving average in the eye was too much for the August feeder cattle contract -- and all others as well. August feeders closed $1.80 lower at $151.07, September feeders closed $1.72 lower at $152.55 and October feeders closed $1.62 lower at $153.72. At Clovis Livestock Auction in Clovis, New Mexico, compared to last week, steer calves under 600 pounds sold unevenly steady and feeders over 600 pounds sold $2.00 higher. Heifer calves under 550 pounds sold $3.00 lower while calves and feeders over 550 pounds traded steady to $1.00 higher. Slaughter cows traded $1.00 to $2.00 higher and demand was moderate to strong throughout the sale. The CME Feeder Cattle Index for May 19: up $0.06, $133.86.
LEAN HOGS:
The cash hog market closed lower Thursday afternoon, but the strength gained in the pork cutout value, alongside the strong export report, was enough to encourage traders into pushing the lean hog futures complex higher. June lean hogs closed $1.30 higher at $112.25, July lean hogs closed $2.15 higher at $113.55 and August lean hogs closed $1.82 higher at $109.32. Pork cutouts totaled 291.26 loads with 256.87 loads of pork cuts and 34.39 loads of trim. Pork cutout values: up $1.21, $119.22. Thursday's slaughter is estimated at 477,000 head, 2,000 head less than a week ago. The CME Lean Hog Index for May 18: down $0.17, $111.62.
Thursday's actual slaughter data shared that, for the week ending May 8, both live and dressed hog carcass weights were down 1 pound from the previous week. Live carcasses averaged 288 pounds and dressed carcasses averaged 215 pounds.
Pork net sales of 19,200 mt reported for 2021 were up 29% from previous week but down 1% from the prior four-week average. The three largest buyers were Mexico (8,300 mt), Japan (3,600 mt) and China (3,100 mt).
FRIDAY'S CASH HOG CALL: Lower. With packers processing very few hogs on Saturday, their aggression toward the later part of the week isn't likely to be much.
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