GENERAL COMMENTS:
The livestock complex is trading in a split manner Thursday as sharply higher corn prices pressure the feeder cattle futures, but higher boxed beef prices and a strong export report give live cattle futures traders a bit of support. Lean hog futures aren't wanting to move stronger, technically speaking, as the market has already climbed to lofty levels. But demand is still wildly noted as tight supplies drive prices higher. July corn is up 38 cents per bushel and July soybean meal is up $5.20. The Dow Jones Industrial Average is up 150.08 points and NASDAQ is up 26.28 points.
LIVE CATTLE:
After closing lower Wednesday, live cattle futures are back to trading mildly higher, still unwilling to get too wildly confident amid the market's uncertainty about when boxed beef prices will top and just how aggressive packers intend to be with slaughter speeds. June live cattle are up $0.32 at $116.77, August live cattle are up $0.30 at $119.62 and October live cattle are up $0.30 at $124.37. Thursday's strong export report could be fueling some of the positivity noted in the market. But, then again, this market's problem isn't a lack of demand, but rather a lack of throughput in the packing sector. The cash cattle market is still quiet without any bids having been renewed and it's looking like the bulk of the week's business could be essentially done.
The special Fed Cattle Exchange Auction held Thursday listed a total of 10,371 head (Texas 9,652; Kansas 447; Nebraska 272), of which all went unsold as they did not meet the reserve prices which ranged from $117 to $120. Opening prices ranged from $114.50 to $118 and high bids ranged from $115 to $119.
Beef net sales of 27,900 metric tons (mt) reported for 2021 were up 19% from the previous week and 45% from the prior four-week average. The three largest buyers were China (9,000 mt), Japan (8,800 mt) and South Korea (6,000 mt). Last week's export report needed to be adjusted as the shipment to the Netherlands were adjusted down 33,589 mt for the week ended May 13.
Boxed beef prices are higher: choice up $0.75 ($330.24) and select up $0.17 ($304.22) with a movement of 50 loads (24.46 loads of choice, 13.41 loads of select, 8.44 loads of trim and 3.74 loads of ground beef).
FEEDER CATTLE:
Who decided that once corn got to around $6.25 per bushel it would be a good idea for the market to rally again? When the feeder cattle contracts were just finally seeming to catch a break, the corn market shot higher at Thursday's opening bell. With gains of 24 to 35 cents in the nearby corn contracts, the feeder cattle market doesn't stand a chance at rallying. August feeders are down $2.10 at $153.10, September feeders are down $2.05 at $155.05 and October feeders are down $1.97 at $156.50.
LEAN HOGS:
Lean hog futures may be mostly lower but that doesn't mean the market's fundamentals aren't strong, which is rather surprising given that this weekend will be cut short for the Memorial Day holiday. Cash hog prices are sharply higher and even pork cutouts are up. Don't put all of your eggs in one basket though; it's still important to see how Thursday afternoon reports close, as much could change by the day's end. June lean hogs are up $0.17 at $115.45, July lean hogs are down $0.17 at $116.22 and August lean hogs are up $0.05 at $113.65.
The projected CME Lean Hog Index for 5/26/2021 is up $0.58 at $113.08 and the actual index for 5/25/2021 is up $0.30 at $112.50. Hog prices are higher on the National Direct Morning Hog Report, up $3.86 with a weighted average of $106.67 ranging from $99.84 to $114.00 on 7,130 head and a five-day rolling average of $105.28. Pork cutouts total 135.26 loads with 113.55 loads of pork cuts and 21.71 loads of trim. Pork cutout values: up $1.60, $125.58.
Pork net sales of 45,900 mt reported for 2021 were up noticeably from the previous week and up 56% from the prior four-week average. The three primary buyers were Mexico (21,800 mt), China (9,600 mt) and Japan (7,700 mt).
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