GENERAL COMMENTS:
Even though corn futures are lower, the feeder cattle and live cattle contracts are leery of the market. JBS is processing on Thursday, but the realization that this cyberattack will have lasting effects on the market is sinking in. July corn is down 9 1/4 cents per bushel and July soybean meal is down $1.60. The Dow Jones Industrial Average is up 37.29 points and NASDAQ is down 114.99 points.
LIVE CATTLE:
With boxed beef prices rallying to unfathomable levels, you'd think packers would pity the cash cattle market; but that's not the case. For the sixth week in a row, cash cattle prices continue to trade at $119 to $120 live and mostly $191 dressed. Thankfully, JBS has worked vigorously to get their plants back up to "almost" normal production levels. But we must remember that it's insufficient. Sufficient throughput was an issue before the industry saw JBS shut down due to the cyberattack. Now that the market has had a hiccup, being dark on days that they anticipated being fully operational, we need to see processing at maximum capacity. A day or two of "being down" may not seem like a big issue to the outside world, but feedlots know all too well how dangerous and how long lasting these unforeseen trials can be. If the market doesn't see faster processing speeds or Saturday shifts scheduled, there's no doubt a backlog in supplies of market ready cattle will begin to form. June live cattle are down $0.20 at $116.92, August live cattle are down $0.55 at $118.75 and October live cattle are down $0.30 at $124.60. There's been some cash cattle trade Thursday morning in parts of Kansas for $120 and bids of $120 are being offered in Nebraska, as well as dressed bids of $191.
Boxed beef prices are higher: choice up $1.36 ($341.52) and select up $1.63 ($313.51) with a movement of 66 loads (40.82 loads of choice, 12.62 loads of select, 3.62 loads of trim and 8.80 loads of ground beef).
FEEDER CATTLE:
The corn market has been fickle this week as rain could damage the new corn crop. Consequently, feeder cattle futures have traded in a back-and-forth manner. The futures find absolutely no hope from the cash cattle market as cash cattle prices hold steady for the sixth week in a row and concerns about supplies building up are on the forefront of minds. As we know all too well from last year's experiences, a backlog in supplies for the feedlot industry not only affects the cash cattle market's ability to find upward momentum but it also affects feeder cattle prices as buyers have limited pen space and lost money on cattle sitting idly. Thankfully the market has fewer calves to market this summer and fall and that could be the saving grace the market desperately needs. August feeders are down $0.35 at $151.97, September feeders are down $0.40 at $154.40 and October feeders are down $0.42 at $156.07.
LEAN HOGS:
The nearby futures closed lower Wednesday afternoon, but the deferred contract's gusto has spilled over into the nearby contracts and is allowing for the entire market to trade higher Thursday. With packers anticipated to process around 472,000 head Thursday, traders (though still cautious) are feeling like the market's fundamental beat is making a quick comeback. June lean hogs are up $0.70 at $118.95, July lean hogs are up $0.17 at $118.65 and August lean hogs are up $0.50 at $117.30. Demand continues to thrive amid tight supplies, so the biggest factor for the rest of this week and next will be to meticulously monitor processing speeds as packers need to make up for lost time but continue to battle labor shortages.
The projected CME Lean Hog Index for 6/2/2021 is up $0.30 at $114.05, and the actual index for 6/1/2021 is up $0.21 at $113.75. Hog prices are lower on the National Direct Morning Hog Report, down $3.08 with a weighted average of $102.48, ranging from $99.84 to $112.00 on 3,948 head and a five-day rolling average of $103.87. Pork cutouts total 152.06 loads with 125.90 loads of pork cuts and 26.15 loads of trim. Pork cutout values: up $2.24, $131.83.
No comments:
Post a Comment