GENERAL COMMENTS:
It's been a tough day for the livestock market as the contracts all trade lower, but especially so in live cattle futures as the cash market has bowed lower yet again. As feedlots worry about cattle moved, their desire to hold out for higher prices has dissipated. July corn is up 8 cents per bushel and July soybean meal is down $1.30. The Dow Jones Industrial Average is up 71.27 points and NASDAQ is up 87.02 points.
LIVE CATTLE:
Live cattle futures aren't gaining strength and are losing ground as the morning's online auction saw cash cattle trade for $117 to $120. The bottom side of the market gave away and is showing just how desperate feedlots are to get cattle moved. With processing speeds slow, their desire to hold out for higher prices has gone to the wayside. The rest of the countryside has been quiet without any bids renewed. Southern cattle traded Tuesday for $119 to $120 and Northern cattle sold for $188 to $192. Asking prices for cattle left on showlists are $121-plus in the South and $192-plus in the North. Upon seeing the regression in the cash cattle market, the futures market has begun to trade lower. June live cattle are down $0.27 at $116.45, August live cattle are down $0.67 at $119.45 and October live cattle are down $0.52 at $124.02.
The Fed Cattle Exchange Auction listed 15,237 head, of which 1,419 actually sold; 1,081 head were scratched from the auction; and 12,737 head were listed as unsold, as they did not meet the reserve prices which ranged from $117 to $120. Opening prices ranged from $100 to $119, high bids ranged from $100 to $117. The state-by-state breakdown looks like this: Texas 14,039 total head, with 1,419 head sold at $116 to $117, 11,611 head went unsold, and 1,009 head were scratched from the auction; Nebraska 481 total head, all of which went unsold; Kansas 717 total head, with 645 head unsold, and 72 head were scratched from the auction.
Boxed beef prices are mixed: choice down $0.46 ($329.46) and select up $2.04 ($206.30) with a movement of 82 loads (57.31 loads of choice, 13.79 loads of select, 6.06 loads of trim and 5.09 loads of ground beef).
FEEDER CATTLE:
Corn futures haven't fully committed to trading higher as the nearby contracts are only rallying modestly; but any sort of higher trade puts the feeder cattle contracts on edge. August feeders are down $0.55 at $156.12, September feeders are down $0.25 at $157.67 and October feeders are down $0.10 at $158.70. The feeder cattle contracts have taken an utter beating with the market's lower cash cattle prices and higher corn prices. Even with Tuesday's substantial rally, cattlemen would like the market to continue its upside move. But until the cash cattle market can show some positivity, the feeder cattle contracts are relying solely on lower corn prices for their momentum.
LEAN HOGS:
Lean hog futures trended slightly lower throughout Wednesday; that shouldn't come as a blistering surprise. With the lofty advancements made in the pork cutout values and the vigorous jump that cash hog prices made Monday, the market expected to see some downward pressure later in the week. Seeing the morning's slightly weaker pork cutout values isn't something to be too overly concerned about as the afternoon report is the one to watch. And, again, given the high prices the market is currently trading at we fully expect some volatile dips along the way. June lean hogs are down $0.47 at $114.77, July lean hogs are down $1.27 at $116.22 and August lean hogs are down $0.20 at $113.45.
Hog prices are lower on the National Direct Morning Hog Report, down $2.99 with a weighted average of $102.81, ranging from $101.17 to $112.00 on 3,315 head and a five-day rolling average of $105.01. Pork cutouts total 163.60 loads with 137.60 loads of pork cuts and 25.99 loads of trim. Pork cutout values: down $0.26, $124.26.
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