GENERAL COMMENTS:
A technical sell-out throughout the futures market may have pushed most of the livestock contracts lower, but the market wasn't able to hinder the rally on feeder cattle prices -- thankfully! Hog prices closed sharply lower on the National Direct Afternoon Hog Report, down $6.17 with a weighted average of $122.28 on 9,296 head. July corn is down 40 cents per bushel and July soybean meal is down $17.70. The Dow Jones Industrial Average is down 210.22 points and NASDAQ is up 121.68 points.
LIVE CATTLE:
The live cattle contracts fell victim to the same depressing movement that took some of the wind out of the feeder cattle contracts -- a technical sell out. June live cattle closed $2.20 lower at $120.10, August live cattle closed $3.82 lower at $121.10 and October live cattle closed $3.40 lower at $126.57. Thursday's trade didn't help the live cattle complex at all, as the market stomached a weaker export report, noted heavier steer weights on USDA's actual slaughter data report and continues to watch the boxed beef market veer lower. Despite the technical pressure that the market had to manage, it was interest to see some dressed cattle in Nebraska sell for as much as $200.00. Throughout the week, cattle in the North have sold for $192 to $200, though mostly at $195 which is $4.00 higher than a week ago. Southern live cattle have sold anywhere from $120 to $124, mostly at $122 which is $2.00 higher than last week. Thursday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 1,000 head more than year ago.
Thursday's actual slaughter data shared that for the week ending June 5, 2021, steers gained 7 pounds to average 891 pounds, and heifers lost 5 pounds from the previous week to average 812 pounds.
Beef net sales of 12,800 mt reported for 2021 were down 20% from the previous week and 36% from the prior four-week average. The three largest buyers were Japan (4,400 mt), China (3,600 mt) and South Korea (1,700 mt).
Boxed beef prices closed lower: choice down $2.92 ($326.25) and select down $2.72 ($287.24) with a movement of 118 (75.59 loads of choice, 23.43 loads of select, 11.79 loads of trim and 6.87 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. With there having been trade in both the North and South, prices will likely remain steady with the week's trend.
FEEDER CATTLE:
The feeder cattle market was trading stronger throughout Thursday morning, but as the futures market grew leery, the rally in the feeder cattle contracts was slightly hindered. Looking at how the rest of the livestock contracts closed though, it's evident that the feeder cattle contracts fared the best through Thursday's trade and thankfully the market's momentum carried into Superior's Corn Belt Classic sale. While monitoring the markets, I spent a large portion of the day also keeping tabs on how the various lots were selling and there's no denying that this year's Corn Belt Classic will average far better than last year's sale on most weight groups. We will be sharing the market's summary when it becomes available. August feeders closed $0.30 lower at $157.40, September feeders closed $0.70 lower at $159.10 and October feeders closed $0.62 lower at $160.70. The CME Feeder Cattle Index for June 16: up $0.93, $141.28.
LEAN HOGS:
The lean hog market had a tough day as the market suffered a limit-lower close in both the July and August contracts and it also endured a plummet in cash hog prices. July lean hogs closed $4.50 lower at $111.00, August lean hogs closed $4.50 lower at $107.20 and October lean hogs closed $4.10 lower at $86.92. Simply put, the lean hog market is enduring a change in its technical attitude as the market transitions to lower trade after an incredible, nearly unfathomable rally since the beginning of the year. Supplies are still tight throughout the countryside, and even though the pork cutout value has been closing lower as of late (Thursday being an exception), consumers are still making their way over to the meat counter consistently. Pork cutouts totaled 276.19 loads with 233.77 loads of pork cuts and 42.42 loads of trim. Pork cutout values: up $4.31, $124.83. Thursday's slaughter is estimated at 478,000 head,4,000 head less than a week ago and 13,000 head more than a year ago. Wednesday's hog slaughter was revised to 477,000 head, which is 6,000 head less than what was originally stated. The CME Lean Hog Index for June 15: down $0.08, $122.60.
Thursday's actual slaughter data shared that, for the week ending June 5, live carcass weights gained 2 pounds to average 289 pounds and dressed carcass weights gained 1 pound from the previous week to average 215 pounds.
Pork net sales of 29,300 mt reported for 2021 were up 49% from the previous week and 8% from the prior four-week average. The three largest buyers were Mexico (19,100 mt), Japan (5,300 mt) and South Korea (2,300 mt).
FRIDAY'S CASH HOG CALL: Lower. Given the technical pressure of the marketplace, packers will most likely try to buy hogs again at lower prices.
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