GENERAL COMMENTS:
Livestock futures prices are largely mixed through the first portion of Friday's trade, with a disappointing export sales report and another day of big gains in feed prices adding a bearish tone to the livestock board. Nevertheless, some active trade in lean hog futures has pulled nearby contracts to fresh contract highs, extending their six-month rally. July corn is up 17 cents per bushel, and May soybean meal is up $2.20 per ton. The Dow Jones Industrial Average is up 98 points, and the NASDAQ is up 221 points.
LIVE CATTLE:
Trading activity has been quiet so far in the live cattle futures markets, with mixed results: The nearby June contract is up $0.375 at $117.15, the August contract is also higher at the middle of the trading session, but the October and December contracts keep slipping into the red. A disappointing weekly export sales report showed net beef sales of 12,600 metric tons, down 55% from the previous week and down 38% from the four-week average. Actual physical export progress was a marketing-year low. Fortunately, in the United States, boxed beef demand and prices remain very strong: choice down $1.05 Friday morning ($339.50) and select down $0.16 ($313.00) with a movement of 64 total loads (37.33 loads of choice, 10.68 loads of select, 8.39 loads of trim and 7.74 loads of ground beef). And despite the hacker mischief earlier in the week, cattle slaughter is seen to be picking up some of the slack with 120,000 head Friday, so the market is justified in getting back to its previous sideways price track. So far this week in the cash cattle market, Southern live deals took place mostly at $120 and Northern dressed deals took place mostly at $191. Asking prices for cattle left on showlists Friday are around $120 plus in the South and $192 plus in the North..
FEEDER CATTLE:
It's another one of those days when corn prices are up by double digits, setting the price tag for any feed needs before early September-harvested corn becomes available higher than $6 per bushel. On the other hand, the DDGs price tag (average of spot prices collected by DTN) actually dropped $7 this week to $211 per ton due to increased production at ethanol plants. There has been some improvement in the Western drought scenario lately, but now the forecast looks grim. Yet all hope is not lost in cattle country, and feeder cattle futures are staying inside a fairly sideways path Friday. The August contract is down $1.425 at $151.525, the September contract is down $1.425 at $154.075, and the October contract is down $1.475 at $155.90.
LEAN HOGS:
Lower movement in the U.S. Dollar Index Friday morning isn't getting much of a bullish reaction in the export-sensitive lean hog futures market and was instead contradicted by a disappointing export sales report. Net pork sales of 24,300 metric tons (mostly to Mexico, some to China) were down 47% from the previous week and down 24% from the four-week average. Nevertheless, the nearby June futures chart has managed to inch its way to a fresh contract high Friday: $119.85 per cwt, and more trading volume may follow through the afternoon. The deferred contracts show mixed performance, although the July contract is getting lots of attention, now $1.85 higher at $120.85.
The projected lean hog index for 6/2/2021 is up $0.30 at $114.05, and the actual index for 6/1/2021 was up $0.21 at $113.75. Pork cutouts Friday morning total 216.86 loads with 200.38 loads of pork cuts and 16.48 loads of trim. Pork cutout values: up $6.07, $137.59. Friday's hog slaughter is projected at 477,000 head.
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