GENERAL COMMENTS:
Feeder cattle futures skip into Wednesday afternoon trade as corn faces lower prices, but live cattle and lean hog contracts are both teetering with a mixed marketplace. Demand in the nearby contracts for both markets remains good, which is encouraging the higher trade; but take a broader look at the market and the deferred contracts aren't as confident. July corn is down 13 cents per bushel and July soybean meal is down $6.50. The Dow Jones Industrial Average is down 280.00 points and NASDAQ is down 69.08 points.
LIVE CATTLE:
Live cattle contracts are split heading into Wednesday afternoon as the nearby contracts cling to their slight advancements, but the deferred contracts are veering lower. June live cattle are up $0.17 at $116.92, August live cattle are up $0.37 at $120.10 and October live cattle are up $0.07 at $124.60. It was encouraging at midday to see there had already been 87 loads accounted, which could mean that Wednesday's total loads could be higher than recent weeks have been trending. There's been a light trade develop in parts of Kansas Wednesday morning at $119, which is fully steady with last week's business. It's expected more business will develop as the day plays on.
The Fed Cattle Exchange Auction listed a total of 2,792 head of which 336 actually sold; 2,456 head were listed as unsold as they did not meet the reserve prices, which ranged from $119 to $120. Opening prices ranged from $116 to $118.75. High bids ranged from $117.50 to $119.75. The state-by-state breakdown looks like this: Texas 1,972 total head, with 167 head sold at $119.00-$119.75, 1,805 head unsold; Nebraska 540 total head, with all 540 head unsold; Kansas 280 total head, with 169 head sold at $119.00, and 111 head unsold.
Boxed beef prices are higher: choice up $0.14 ($323.48) and select up $0.63 ($299.68) with a movement of 87 loads (41.95 loads of choice, 10.69 loads of select, 27.39 loads of trim and 6.90 loads of ground beef).
FEEDER CATTLE:
The $0.15 to $0.16 regression in the corn market is adding a little extra pep into the feeder cattle contracts. May feeders are up $0.40 at $137.60, August feeders are up $1.12 at $153.05 and September feeders are up $0.82 at $154.35. The August feeder cattle contract continues to trade right above the 100-day moving average and, if the market's support can continue throughout the afternoon, the contract will be very close to closing near the 40-day moving average. If the cash cattle market could show some strength it would help the feeder cattle contracts. But as of right now the only supporting factor the market has to look to is the recent rain parts of the countryside has been blessed with and the lower trending corn prices.
LEAN HOGS:
After packers bought upward of 8,000 hogs Tuesday afternoon there was concern they wouldn't be aggressive in Wednesday's cash hog market. But thus far packers have shown plenty of interest. Thankfully strong demand continues to stem from both pork cutout values and the cash market, which is allowing the nearby lean hog contracts to move higher while the deferred contracts worry about large supplies toward the end of the year. June lean hogs are up $0.37 at $111.02, July lean hogs are up $0.12 at $111.62 and August lean hogs are up $0.12 at $107.87.
The projected CME Lean Hog Index for 5/18/2021 is down $0.15 at $111.60 and the actual index for 5/17/2021 is up $0.36 at $111.75. Hog prices are higher on the National Direct Morning Hog Report, up $6.38 with a weighted average of $109.61, ranging from $101.68 to $117.00 on 4,830 head and a five-day rolling average of $107.91. Pork cutouts total 183.77 loads with 154.47 loads of pork cuts and 29.30 loads of trim. Pork cutouts: up $1.57, $117.63.
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